Amb Financial Corp – ‘10KSB40’ for 12/31/01

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Annual Report — Small Business — [x] Reg. S-B Item 405   —   Form 10-KSB
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Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB40     Amb Financial Corp. Form 10-Ksb 12/31/2001            39    197K 
 2: EX-13       Annual Report                                         46    239K 
 3: EX-21       Subsidiaries of the Registrant                         1      4K 
 4: EX-23       Independent Auditor's Consent                          1      5K 

10KSB40   —   Amb Financial Corp. Form 10-Ksb 12/31/2001
Document Table of Contents

10KSB40
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================================================================================

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-KSB

[X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      
EXCHANGE ACT OF 1934                                      

 For the fiscal year ended December 31, 2001

OR

[_]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
EXCHANGE ACT OF 1934                                      

 For the transition period from ____________ to ____________

COMMISSION FILE NUMBER 0-23182

 AMB FINANCIAL CORP.
--------------------------------------------------------------------------------
 (Exact Name of Small Business Registrant as Specified in its Charter)

Delaware                                     35-1905382 
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)                                                

8230 Hohman Avenue, Munster, Indiana                             46321-1578     
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)     

Registrant's telephone number, including area code:  (219) 836-5870             
                                        --------------

 Securities Registered Pursuant to Section 12(b) of the Act:

None

 Securities Registered Pursuant to Section 12(g) of the Act:

 Common Stock, par value $0.01 per share
 ---------------------------------------
(Title of class)

    Check whether the Registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past twelve months (or for   
such shorter period that the Registrant was required to file such reports), and 
(2) has been subject to such requirements for the past 90 days. YES [X]. NO [ ].

  Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be         
contained, to the best of Registrant's knowledge, in definitive proxy or        
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]                                       

The Registrant had $10.9 million in gross income for the year ended   
December 31, 2001.                                                              

  The aggregate market value of the voting stock held by non-affiliates of
the Registrant, computed by reference to the average of the bid and asked price 
of such stock as of December 31, 2001 was $3.8 million. (The exclusion from such
amount of the market value of the shares owned by any person shall not be deemed
an admission by the Registrant that such person is an affiliate of the          
Registrant.)                                                                    

   As of March 13, 2002, there were issued and outstanding 861,063 shares of
the Registrant's Common Stock.                                                  

 DOCUMENTS INCORPORATED BY REFERENCE

Parts II and IV of Form 10-KSB - Annual Report to Stockholders for the fiscal   
year ended December 31, 2001. Part III of Form 10-KSB - Proxy Statement for the 
2002 Annual Meeting of Stockholders.                                            

  Transitional Small Business Disclosure Format: Yes  [ ] No  [X].
================================================================================

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FORWARD-LOOKING STATEMENTS                                                      

 AMB Financial Corp. ("AMB Financial"), and its wholly-owned subsidiary,
American Savings, FSB ("American Savings"), may from time to time make written  
or oral "forward-looking statements," including statements contained in its     
filings with the Securities and Exchange Commission (the "SEC"). These          
forward-looking statements may be included in this Annual Report on Form 10-KSB 
and the exhibits attached to it, in AMB Financial's reports to shareholders and 
in other communications, which are made in good faith by us pursuant to the     
"safe harbor" provisions of the Private Securities Litigation Reform Act of     
1995.                                                                           

These forward-looking statements include statements about our beliefs,
plans, objectives, goals, expectations, anticipations, estimates and intentions,
that are subject to significant risks and uncertainties, and are subject to     
change based on various factors, some of which are beyond our control. The words
"may," "could," "should," "would," "believe," "anticipate," "estimate,"         
"expect," "intend," "plan" and similar expressions are intended to identify     
forward-looking statements. The following factors, among others, could cause our
financial performance to differ materially from the plans, objectives,          
expectations, estimates and intentions expressed in the forward-looking         
statements:                                                                     

   o   the strength of the United States economy in general and the strength
of the local economies in which we conduct operations;        
     o   the effects of, and changes in, trade, monetary and fiscal policies and
      laws, including interest rate policies of the Federal Reserve Board;
o   inflation, interest rate, market and monetary fluctuations;       
o   the timely development of and acceptance of our new products      
and services and the perceived overall value of these products
and services by users, including the features, pricing and    
quality compared to competitors' products and services;       
  o   the willingness of users to substitute our products and services for
products and services of our competitors;                     
o   our success in gaining regulatory approval of our products and    
services, when required;                                      
o   the impact of changes in financial services' laws and regulations 
       (including laws concerning taxes, banking, securities and insurance);
o   the impact of technological changes;                              
o   acquisitions;                                                     
o   changes in consumer spending and saving habits; and               
o   our success at managing the risks involved in the foregoing.      

The list of important factors stated above is not exclusive. We do not
undertake to update any forward-looking statement, whether written or oral, that
may be made from time to time by or on behalf of AMB Financial or American      
Savings.                                                                        

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PART I

ITEM 1. DESCRIPTION OF BUSINESS                                                 
-----------------------                                         

AMB Financial was formed in 1993 by American Savings under the laws of
Delaware for the purpose of becoming a savings and loan holding company.        
American Savings, headquartered in Munster, Indiana, was founded in 1957 as a   
federally chartered institution. In March 1996, American Savings converted to   
the stock form of organization through the sale and issuance of 1,124,125 shares
of its common stock to AMB Financial. The principal asset of AMB Financial is   
the outstanding stock of American Savings. AMB Financial presently has no       
separate operations and its business consists only of the business of American  
Savings. All references to AMB Financial, unless otherwise indicated, at or     
before March 29, 1996 refer to American Savings. References in this Form 10-KSB 
to "we", "us" and "our" refer to AMB Financial and/or American Savings as the   
context requires.                                                               

 We are a community-based financial institution that offers a variety of
selected financial services to meet the needs of the community we serve. We     
attract deposits from the general public and use such deposits to originate and 
purchase one- to four-family residential mortgages and, to a lesser extent, non-
residential real estate, commercial business, consumer, construction,           
multi-family real estate, and land loans. We also invest in mortgage-backed     
securities, investment securities consisting primarily of U.S. government       
obligations and various types of short-term liquid assets. See "- Lending       
Activities" and "- Investment Activities."                                      

We serve the financial needs of families and local businesses in our  
primary market area, northwest Lake County, Indiana, through our main office    
located in Munster, Indiana and two branch offices located in the communities of
Dyer and Hammond, Indiana. Our deposits are insured up to applicable limits by  
the Federal Deposit Insurance Corporation (the "FDIC"). At December 31, 2001, we
had total assets of $141.6 million, deposits of $102.2 million and stockholders'
equity of $11.7 million or 8.27% of total assets.                               

 Our executive office is located at 8230 Hohman Avenue, Munster, Indiana
46321-1578 and its telephone number at that address is (219) 836-5870.          

LENDING ACTIVITIES                                                              

Our principal lending activity is originating and, to a lesser extent,
purchasing first mortgage loans secured by owner-occupied one- to four-family   
residential properties located in our primary market areas. We also originate   
and purchase non-residential real estate, commercial business, consumer,        
multi-family real estate, construction and land loans. In addition to increasing
the yield and/or the interest rate sensitivity of our portfolio, these non-one- 
to four family loans allow us to provide more comprehensive financial services  
to families and community businesses in our primary market area.                

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LOAN PORTFOLIO COMPOSITION. The following table sets forth information
concerning the composition of our loan portfolio in dollar amounts and in       
percentages (before deductions for loans in process, net deferred yield         
adjustments and allowances for losses) as of the dates indicated.               

                                                        [Enlarge/Download Table]

                                                                                  December 31,                                      
                                            --------------------------------------------------------------------------------------- 
                                                       2001                          2000                          1999             
                                            --------------------------------------------------------------------------------------- 
                                                Amount        Percent         Amount        Percent         Amount        Percent   
                                            --------------------------------------------------------------------------------------- 
                                                                             (Dollars in Thousands)                                 
Real Estate Loans:                                                                                                                  
-----------------                                                                                                                   
                                                                                                                                    
 One- to four-family....................... $     82,461          70.54%  $     84,349          74.09%  $     82,210          76.11%
 Multi-family..............................        2,297           1.96          2,189           1.92          2,144           1.98 
 Non-residential...........................       12,354          10.57         10,156           8.92          8,775           8.12 
 Construction..............................        2,090           1.79          4,854           4.26          4,279           3.96 
 Land......................................        1,352           1.15          1,041           0.92            632           0.59 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total real estate loans...............      100,554          86.01        102,589          90.11         98,040          90.76 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 

Other Loans:                                                                                                                        
-----------                                                                                                                         
 Consumer Loans:                                                                                                                    
  Deposit account..........................          123           0.11            213           0.19            147           0.13 
  Credit Card..............................          448           0.38            437           0.38            439           0.41 
  Home improvement.........................            -              -              -              -              -              - 
  Line of credit...........................        3,711           3.17          4,130           3.63          3,336           3.09 
  Other ...................................        1,122           0.96          1,101           0.97          1,059           0.98 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total consumer loans..................        5,404           4.62          5,881           5.17          4,981           4.61 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
 Commercial business loans.................       10,951           9.37          5,377           4.72          4,999           4.63 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total loans receivable................      116,909         100.00%       113,847         100.00%       108,020         100.00%
                                            ------------   ============   ------------   ============   ------------   ============ 
Less:                                                                                                                               
----                                                                                                                                
 Loans in process..........................        1,698                           677                         1,523                
 Net deferred yield adjustments............          (68)                          (13)                           (4)               
 Allowance for losses......................          766                           701                           591                
                                            ------------                  ------------                  ------------                
 Total loans receivable, net............... $    114,513                  $    112,482                  $    105,910                
                                            ============                  ============                  ============                

                                                                   December 31,                                                     
                                            ---------------------------------------------------------                               
                                                       1998                          1997                                           
                                            ---------------------------------------------------------                               
                                                Amount        Percent        Amount         Percent                                 
                                            ---------------------------------------------------------                               
                                                             (Dollars in Thousands)                                                 
Real Estate Loans:                                                                                                                  
-----------------                                                                                                                   
 One- to four-family....................... $     63,369          69.69%  $     51,567          64.71%                              
 Multi-family..............................        2,446           2.69          4,010           5.03                               
 Non-residential...........................       10,370          11.40          8,376          10.51                               
 Construction..............................        2,522           2.77          4,450           5.59                               
 Land......................................        1,227           1.35          1,264           1.59                               
                                            ------------   ------------   ------------   ------------                               
     Total real estate loans...............       79,934          87.90         69,667          87.43                               
                                            ------------   ------------   ------------   ------------                               
Other Loans:                                                                                                                        
-----------                                                                                                                         
 Consumer Loans:                                                                                                                    
  Deposit account..........................          172           0.19            165           0.21                               
  Credit Card..............................          414           0.46            405           0.51                               
  Home improvement.........................           10           0.01             11           0.01                               
  Line of credit...........................        3,552           3.91          3,259           4.09                               
  Other ...................................        1,244           1.37          1,264           1.58                               
                                            ------------   ------------   ------------   ------------                               
     Total consumer loans..................        5,392           5.93          5,104           6.40                               
                                            ------------   ------------   ------------   ------------                               
 Commercial business loans.................        5,607           6.17          4,916           6.17                               
                                            ------------   ------------   ------------   ------------                               
     Total loans receivable................       90,933         100.00%        79,687         100.00%                              
                                            ------------   ============   ------------   ============                               
Less:                                                                                                                               
----                                                                                                                                
 Loans in process..........................          569                         1,975                                              
 Net deferred yield adjustments............           95                           209                                              
 Allowance for losses......................          507                           410                                              
                                                --------                  ------------                                              
 Total loans receivable, net...............      $89,762                  $     77,093                                              
                                                 =======                  ============                                              

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    The following table shows the composition of our loan portfolios by fixed-
and adjustable-rate at the dates indicated.                                     

                                                        [Enlarge/Download Table]

                                                                                  December 31,                                      
                                            --------------------------------------------------------------------------------------- 
                                                       2001                          2000                          1999             
                                            --------------------------------------------------------------------------------------- 
                                               Amount         Percent        Amount         Percent        Amount         Percent   
                                            --------------------------------------------------------------------------------------- 
                                                                             (Dollars in Thousands)                                 
Fixed-Rate Loans:                                                                                                                   
----------------                                                                                                                    
 Real estate:                                                                                                                       
                                                                                                                                    
  One- to four-family...................... $     60,721          51.94%  $     52,798          46.38%  $     50,067          46.35%
  Multi-family.............................          741           0.63            579           0.51            618           0.57 
  Non-residential..........................       10,474           8.96          7,552           6.63          5,160           4.78 
  Construction.............................        1,048           0.90          4,693           4.12          3,799           3.52 
  Land.....................................          416           0.35            339           0.30            286           0.27 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total real estate loans...............       73,400          62.78         65,961          57.94         59,930          55.49 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
 Consumer..................................        1,693           1.45          1,751           1.54          1,645           1.52 
 Commercial business.......................        5,784           4.95          4,046           3.55          3,227           2.99 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total fixed-rate loans................       80,877          69.18         71,758          63.03         64,802          60.00 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Adjustable-Rate Loans:                                                                                                              
---------------------                                                                                                               
 Real estate:                                                                                                                       
  One- to four-family......................       21,740          18.60         31,551          27.71         32,143          29.76 
  Multi-family.............................        1,556           1.33          1,610           1.41          1,526           1.41 
  Non-residential..........................        1,880           1.61          2,604           2.29          3,615           3.34 
  Construction.............................        1,042           0.89            161           0.14            480           0.44 
  Land ....................................          936           0.80            702           0.62            346           0.32 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total real estate loans...............       27,154          23.23         36,628          32.17         38,110          35.27 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
 Consumer..................................        3,711           3.17          4,130           3.63          3,336           3.09 
 Commercial business.......................        5,167           4.42          1,331           1.17          1,772           1.64 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
     Total adjustable-rate loans...........       36,032          30.82         42,089          36.97         43,218          40.00 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 

     Total loans receivable................      116,909         100.00%       113,847         100.00%       108,020         100.00%
                                            ------------   ============   ------------   ============   ------------   ============ 
Less:                                                                                                                               
----                                                                                                                                
 Loans in process..........................        1,698                           677                         1,523                
 Net deferred yield adjustment.............          (68)                          (13)                           (4)               
 Allowance for loan losses.................          766                           701                           591                
                                            ------------                  ------------                  ------------                
    Total loans receivable, net............ $    114,513                  $    112,482                  $    105,910                
                                            ============                  ============                  ============                

                                                                   December 31,                                                     
                                            ---------------------------------------------------------                               
                                                       1998                          1997                                           
                                            ---------------------------------------------------------                               
                                               Amount         Percent        Amount         Percent                                 
                                            ---------------------------------------------------------                               
                                                              (Dollars in Thousands)                                                
Fixed-Rate Loans:                                                                                                                   
----------------                                                                                                                    
 Real estate:                                                                                                                       
  One- to four-family...................... $     39,243          43.16%  $     38,967          48.90%                              
  Multi-family.............................          688           0.76          1,847           2.32                               
  Non-residential..........................        2,685           2.95          3,364           4.22                               
  Construction.............................        1,242           1.37          2,893           3.63                               
  Land.....................................          338           0.37            211           0.27                               
                                            ------------   ------------   ------------   ------------                               
     Total real estate loans...............       44,196          48.60         47,282          59.34                               
                                            ------------   ------------   ------------   ------------                               
 Consumer..................................        1,840           2.02          1,845           2.31                               
 Commercial business.......................        5,026           5.53          3,828           4.80                               
                                            ------------   ------------   ------------   ------------                               
     Total fixed-rate loans................       51,062          56.15         52,955          66.45                               
                                            ------------   ------------   ------------   ------------                               
Adjustable-Rate Loans:                                                                                                              
---------------------                                                                                                               
 Real estate:                                                                                                                       
  One- to four-family......................       24,126          26.53         12,600          15.81                               
  Multi-family.............................        1,758           1.93          2,163           2.71                               
  Non-residential..........................        7,685           8.45          5,012           6.29                               
  Construction.............................        1,280           1.41          1,557           1.96                               
  Land ....................................          889           0.98          1,053           1.32                               
                                            ------------   ------------   ------------   ------------                               
     Total real estate loans...............       35,738          39.30         22,385          28.09                               
                                            ------------   ------------   ------------   ------------                               
 Consumer..................................        3,552           3.91          3,259           4.09                               
 Commercial business.......................          581           0.64          1,088           1.37                               
                                            ------------   ------------   ------------   ------------                               
     Total adjustable-rate loans...........       39,871          43.85         26,732          33.55                               
                                            ------------   ------------   ------------   ------------                               

     Total loans receivable................       90,933         100.00%        79,687         100.00%                              
                                            ------------   ============   ------------   ============                               
Less:                                                                                                                               
----                                                                                                                                
 Loans in process..........................          569                         1,975                                              
 Net deferred yield adjustment.............           95                           209                                              
 Allowance for loan losses.................          507                           410                                              
                                            ------------                  ------------                                              
    Total loans receivable, net............ $     89,762                  $     77,093                                              
                                            ============                  ============                                              

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   The following table illustrates the interest rate sensitivity of the loan
portfolio at December 31, 2001. Mortgages which have adjustable or renegotiable 
interest rates are shown as maturing in the period during which the contract    
requires the final payment to be made. This is shown without regard to interest 
rate adjustments. The table does not reflect the effects of possible prepayments
or enforcement of due-on-sale clauses.                                          

                                                        [Enlarge/Download Table]

                                                       Real Estate                                                              
                            --------------------------------------------------------------                                      
                                                     Multi-family and                                                           
                             One- to Four-Family     Non-residential        Construction         Land              Consumer     
                            ----------------------------------------------------------------------------------------------------
                                       Weighted              Weighted            Weighted           Weighted           Weighted 
                                        Average               Average             Average            Average            Average 
                              Amount     Rate      Amount      Rate     Amount     Rate     Amount    Rate     Amount    Rate   
                            ----------------------------------------------------------------------------------------------------
                                                                                                 (Dollars in Thousands)         
Due During the                                                                                                                  
Period Ending                                                                                                                   
December 31,                                                                                                                    
---------------------------                                                                                                     
                                                                                                                                
2002....................... $   1,233    7.15%        447      9.50%     1,048     7.44%$     179     6.$8%    4,235      6.7$% 
2003 to 2004...............     3,527    7.52       4,724      7.77      1,042     4.88       959     6.65       684      9.95  
2005 and  2006.............     4,844    7.31       2,805      8.37         --       --       149     8.50       307      8.66  
2007 to 2011...............    13,430    7.28       3,088      8.09         --       --        33     8.50        --        --  
2012 to 2021...............    22,430    7.37       1,691      8.65         --       --        32     8.50       178      8.93  
2022 and following.........    36,997    7.23       1,896      8.25         --       --        --       --        --        --  
                            ---------            --------               ------             ------             ------            
   Total................... $  82,461    7.29%     14,651      8.17%    $2,090     6.16%   $1,352     6.91%   $5,404      7.31% 
                            =========            ========               ======             ======             ======            

                                Commercial                                                                                      
                                 Business              Total                                                                    
                            ------------------------------------------                                                          
                                      Weighted              Weighted                                                            
                                       Average              Average                                                             
                              Amount    Rate      Amount      Rate                                                              
                            ------------------------------------------                                                          
                                      (Dollars in Thousands)                                                                    
Due During the                                                                                                                  
Period Ending                                                                                                                   
December 31,                                                                                                                    
---------------------------                                                                                                     
2002.......................    2,960    7.00%     10,102     7.04%                                                              
2003 to 2004...............    5,696    7.01      16,632     7.30                                                               
2005 and  2006.............      708    7.68       8,813     7.75                                                               
2007 to 2011...............    1,587    7.43      18,138     7.43                                                               
2012 to 2021...............       --      --      24,331     7.47                                                               
2022 and following.........       --      --      38,893     7.28                                                               
                             -------            --------                                                                        
   Total...................  $10,951     7.1%   $116,909     7.36%                                                              
                             =======            ========                                                                        

The total amount of loans due after December 31, 2002 which have      
predetermined interest rates is $77.5 million. The total amount of loans due    
after such dates which have floating or adjustable interest rates is $29.3      
million.                                                                        

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   Under federal law, the aggregate amount of loans that we are permitted to
make to any one borrower is generally limited to 15% of unimpaired capital and  
surplus (25% if the security for such loan has a "readily marketable" value or  
30% for certain residential development loans). At December 31, 2001, our       
regulatory loan-to-one borrower limit was approximately $1.5 million. On the    
same date, we had no borrowers with outstanding balances in excess of this      
amount. As of December 31, 2001, the largest dollar amount of indebtedness to   
one borrower or group of related borrowers was a $1.1 million motel loan located
in Lansing, Illinois. On the same date, this loan was performing in accordance  
with its terms.                                                                 

    All of our lending is subject to our written underwriting standards and to
loan origination procedures. Decisions on loan applications are made on the     
basis of detailed applications and property valuations by qualified independent 
appraisers. Loans greater than $500,000 must be approved by the Board of        
Directors after review and preliminary approval by the Loan Committee. The loan 
applications are designed primarily to determine the borrower's ability to repay
and the more significant items on the application are verified through use of   
credit reports, financial statements, tax returns and/or confirmations.         

     Generally, we require title insurance on our mortgage loans as well as fire
and extended coverage casualty insurance in amounts at least equal to the       
principal amount of the loan or the value of improvements on the property,      
depending on the type of loan. We also require flood insurance to protect the   
property securing our interest when the property is located in a flood plain or 
otherwise deemed prudent by management.                                         

     ONE- TO FOUR-FAMILY RESIDENTIAL REAL ESTATE LENDING. The cornerstone of our
lending program is the origination of long-term permanent loans secured by      
mortgages on owner-occupied one- to four-family residences. At December 31,     
2001, $82.5 million, or 70.54% of our loan portfolio consisted of permanent     
loans on one- to four-family residences. At that date, the average outstanding  
residential loan balance was $82,000 and the largest outstanding residential    
loan had a principal balance of $983,000. Virtually all of the residential loans
we originate are secured by properties located in our market area. However, we  
have purchased a number of one-to-four family residential loans secured by      
properties located out of our market area. See "- Originations, Sales and       
Purchases of Loans."                                                            

We originate 30-year fixed rate loans secured by one- to four-family  
residential real estate as a result of continued consumer demand. We monitor the
volume and rate of our fixed rate loans to ensure compliance with our           
asset/liability management policy. At December 31, 2001, we had $23.8 million of
fixed-rate residential loans with less than 10 years to contractual maturity,   
$16.0 million of fixed-rate residential loans with remaining contractual        
maturities between 10 and 20 years and $20.9 million of fixed- rate residential 
loans with remaining contractual maturities in excess of 21 years in its        
portfolio. See "Management's Discussion and Analysis of Financial Condition and 
Results of Operations - Asset/Liability Management" in our Annual Report to     
Stockholders for the year ended December 31, 2001 attached hereto as Exhibit 13 
(the "Annual Report").                                                          

    In addition, we originate and acquire adjustable rate mortgage and balloon
loans to reduce our exposure to changes in interest rates. We retain and service
all adjustable rate mortgages and balloon loans we originate. We make such loans
at rates, terms and points determined in accordance with market and competitive 
factors. Our current one- to four-family residential adjustable rate mortgages  
are fully amortizing loans with contractual maturities of up to 30 years. The   
interest rates on the adjustable rate mortgages we originate are generally      
subject to adjustment at three-year intervals based on a margin over the Three  
Year Treasury Securities Constant Maturity Index. Decreases or increases in the 
interest rate of our adjustable rate mortgages are generally limited to 5% above
or below the initial interest rate over the                                     

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life of the loan. Our adjustable rate mortgages are not convertible into        
fixed-rate loans, do not contain prepayment penalties and do not produce        
negative amortization. Adjustable rate mortgage loans may be assumed provided   
home buyers meet our underwriting standards and the applicable fees are paid. At
December 31, 2001, the total balance of one- to four-family adjustable rate     
mortgages was $21.7 million. During 2001 and 2000, we purchased $-0- and $2.0   
million respectively, of adjustable rate one- to four- family first mortgage    
loans. Our balloon loans generally carry seven year terms and 30 year           
amortization schedules. On December 31, 2001, we had $24.1 million of one       
-to-four family balloon loans.                                                  

 We evaluate both the borrower's ability to make principal, interest and
escrow payments and the value of the property that will secure the loan. We     
originate residential mortgage loans with loan-to-value ratios up to 95%. On    
mortgage loans exceeding an 80% loan-to-value ratio at the time of origination, 
we will generally require private mortgage insurance in an amount intended to   
reduce our exposure to 80% or less of the appraised value of the underlying     
property.                                                                       

     As of December 31, 2001, we had 14 one- to four-family residential mortgage
loans having an aggregate balance of $6.1 million with current balances in      
excess of $275,000, the 2001 Freddie Mac maximum. Our delinquency experience on 
our loans in excess of this maximum has been similar to our experience on other 
residential loans.                                                              

Our residential mortgage loans customarily include due-on-sale clauses
giving us the right to declare the loan immediately due and payable in the event
that, among other things, the borrower sells or otherwise disposes of the       
property subject to the mortgage and the loan is not repaid.                    

 MULTI-FAMILY AND NON-RESIDENTIAL REAL ESTATE LENDING. We both originate
and, to a lesser extent purchase, permanent multi-family and non-residential    
real estate loans in our primary market area. We have increased these portfolios
in recent years in accordance with our asset/liability management policy. See   
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations - Asset/Liability Management" in the Annual Report. At December 31,  
2001, we had $14.7 million in multi- family and non-residential real estate     
loans, representing 12.53% of the gross loan portfolio.                         

     The multi-family loan portfolio includes loans secured by five or more unit
residential buildings located primarily in our primary market area. Our         
non-residential real estate loan portfolio consists of loans on a variety of    
non-residential properties including retail facilities, small office buildings  
and motel/hotels.                                                               

   We originate and purchase both adjustable-and fixed-rate multi-family and
non-residential real estate loans. Rates on our adjustable-rate multi-family and
non-residential real estate loans generally adjust in a manner consistent with  
our one- to four-family residential adjustable rate mortgages. Multi-family and 
non-residential real estate loans are generally underwritten in amounts of up to
80% of the appraised value of the underlying property and normally have terms up
to 25 years.                                                                    

 Appraisals on properties securing multi-family and non-residential real
estate loans originated by us are performed by a qualified independent appraiser
at the time the loan is made. In addition, our underwriting procedures generally
require verification of the borrower's credit history, income and financial     
statements, banking relationships, references and income projections for the    
property. Personal guarantees are generally obtained for multi-family and       
non-residential real estate loans.                                              

    Substantially all of the multi-family residential and non-residential real
estate loans originated by us are secured by properties located within 50 miles 
of one or more of our offices.                                                  

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The table below sets forth by type of security property the estimated 
number, loan amount and outstanding balance of our multi-family and             
non-residential real estate loans at December 31, 2001.                         

                                                         OUTSTANDING
                         NUMBER OF       ORIGINAL        PRINCIPAL
                          LOANS        LOAN AMOUNT       BALANCE
                          --------------------------------------------
                          (Dollars in Thousands)

MULTI-FAMILY...................    11          $  3,409         $  2,866        
OFFICE.........................     3               580              532        
RETAIL.........................     3             1,211            1,137        
COMMERCIAL BUILDING............     7             2,238            2,061        
AUTO SERVICE/REPAIR............     1               244              201        
RESTAURANTS....................     5               536              374        
HOTEL..........................     6             4,349            4,016        
NURSING HOME...................     1               500              463        
OTHER..........................    15             3,477            3,001        
                          ----         --------         --------
TOTAL.......................    52          $ 16,544         $ 14,651     
                          ====         ========         ========

    At December 31, 2001, the largest multi-family and largest non-residential
real estate loans totaled $482,000 and $1.1 million, respectively, and consisted
of a fifteen unit apartment building and a motel. As of December 31, 2001, this 
loan was performing in accordance with its terms.                               

Multi-family and non-residential real estate loans generally present a
higher level of risk than loans secured by one- to four-family residences. This 
greater risk is due to several factors, including the concentration of principal
in a limited number of loans and borrowers, the effects of general economic     
conditions on income producing properties and the increased difficulty of       
evaluating and monitoring these types of loans. Furthermore, the repayment of   
loans secured by multi-family residential and non-residential real estate is    
typically dependent upon the successful operation of the related real estate    
project. If the cash flow from the project is reduced (for example, if leases   
are not obtained or renewed), the borrower's ability to repay the loan may be   
impaired. At December 31, 2001, we did not have any multi-family loans which    
were 90 days or more delinquent.                                                

 CONSTRUCTION LENDING. We make construction loans to individuals for the
construction of their primary or secondary residences and loans to builders or  
developers for the construction of single-family and multi-family properties.   

     Loans to individuals for the construction of their residences typically run
for six months. The borrower pays interest only during the construction period. 
Residential construction loans are generally underwritten pursuant to the same  
guidelines used for originating permanent residential loans. At December 31,    
2001, we had one construction loan with an outstanding aggregate balance of     
$180,000 (including $94,000 in undisbursed loan proceeds) secured by one- to    
four- family residential property to borrowers intending to live on the         
properties upon completion of construction. Subject to future market conditions,
we intend to continue construction lending activities to persons intending to be
owner occupants.                                                                

   We also make loans to builders and developers to finance the construction
of residential property. Such loans generally have adjustable interest rates    
based upon prime with terms from six months to one year. The proceeds of the    
loan are advanced during construction based upon the percentage of completion as
determined by an independent inspector. The loan amount normally does not exceed
80% of projected completed value for homes that have been pre-sold to the       
ultimate occupant.                                                              

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For loans to builders for the construction of homes not pre-sold, which may     
carry a higher risk, the loan-to value ratio is generally limited to 75%.       
Whether we are willing to provide permanent takeout financing to the purchaser  
of the home is determined independently of the construction loan by a separate  
underwriting process. At December 31, 2001, we did not have any construction    
loans with outstanding aggregate balances secured by one- to four-family        
residential property built on speculation.                                      

 We also occasionally provide construction financing on multi-family and
commercial real estate. However, there were no loans of this type outstanding as
of December 31, 2001. Additionally, we occasionally participate with other      
lenders in loans to developers and builders to finance multi-family housing and 
commercial property construction. At December 31, 2001, we were involved in     
three participation construction loans with an outstanding aggregate balance of 
$1.9 million (including $1.0 million in undisbursed loan proceeds).             

Construction lending generally affords us an opportunity to receive   
interest at rates higher than those obtainable from residential lending and to  
receive higher origination and other loan fees. In addition, such loans are     
generally made for relatively short terms. Nevertheless, construction lending to
persons other than owner-occupants is generally considered to involve a higher  
level of credit risk than one- to four- family residential lending due to the   
concentration of principal in a limited number of loans and borrowers and the   
effects of general economic conditions on construction projects, real estate    
developers and managers. In addition, the nature of these loans is such that    
they are more difficult to evaluate and monitor. Our risk of loss on a          
construction loan is dependent largely upon the accuracy of the initial estimate
of the property's value upon completion of the project and the estimated cost   
(including interest) of the project. If the estimate of value proves to be      
inaccurate, we may be confronted, at or prior to the maturity of the loan, with 
a project with a value which is insufficient to assure full repayment and/or the
possibility of having to make substantial investments to complete and sell the  
project. Because defaults in repayment may not occur during the construction    
period, it may be difficult to identify problem loans at an early stage. When   
loan payments become due, the cash flow from the property may not be adequate to
service the debt. In such cases, we may be required to modify the terms of the  
loan.                                                                           

     LAND LENDING. Land loans, which include vacant land and developed lots, are
made to various builders and developers with whom we have pre-existing          
relationships. All of such loans are secured by land zoned for residential      
developments and located within our market area. Disbursements related to       
acquisition and development land loans are typically based on the construction  
cost estimate of an independent architect or engineer who inspects the project  
in connection with significant disbursement requests. At December 31, 2001, we  
had $1.4 million in loans secured by land, or 1.15% of our entire gross loan    
portfolio.                                                                      

 Land lending generally affords us an opportunity to receive interest at
rates higher than those obtainable from residential lending. In addition, land  
loans are limited to a maximum 75% loan-to-value and are made with adjustable   
rates of interest and for relatively short terms. Nevertheless, land lending is 
generally considered to involve a higher level of credit risk due to the fact   
that funds are advanced upon the security of the land, which is of uncertain    
value prior to its development. Because of the uncertainties inherent in        
estimating land development costs as well as the market value on the completed  
project and the effects of governmental regulation of real property, it is      
relatively difficult to evaluate accurately the total funds required to complete
a development project and the related loan-to-value ratio.                      

As of December 31, 2001, we have not experienced significant losses in
connection with our land lending. See "Delinquencies and Non-Performing Assets."

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    CONSUMER LENDING. We believe that offering consumer loan products helps to
expand the customer base and to create stronger ties to the existing customer   
base. In addition, because consumer loans generally have shorter terms to       
maturity and carry higher rates of interest than do residential mortgage loans, 
they can be valuable asset/liability management tools. We currently originate   
substantially all of our consumer loans in our market area. At December 31,     
2001, the consumer loans totaled $5.4 million or 4.62% of the gross loan        
portfolio.                                                                      

   We offer a variety of secured consumer loans, including home equity lines
of credit, home improvement loans, loans secured by savings deposits and        
automobile loans. Although we primarily originate consumer loans secured by real
estate, deposits or other collateral, we also make unsecured personal loans.    

   Our home equity lines of credit are generally limited to $100,000. We use
the same underwriting standards for home equity lines of credit as we use for   
one- to four-family residential mortgage loans. Home equity lines of credit are 
originated in amounts which, together with the amount of the first mortgage,    
generally do not exceed 80% of the appraised value of the property securing the 
loan. The interest rate for all home equity loans floats at a stated margin over
the prime rate. At December 31, 2001, we had $3.7 million of home equity lines  
of credit and an $2.8 million of additional funds committed, but undrawn, under 
such lines.                                                                     

We also offer a Visa credit card program. At December 31, 2001,       
approximately 412 credit cards had been issued, with an aggregate outstanding   
loan balance of $448,000 and unused credit available of $367,000. We presently  
charge a fixed rate on interest on credit card loans and no annual membership   
fee.                                                                            

  The terms of other types of consumer loans vary according to the type of
collateral, length of contract, and creditworthiness of the borrower. The       
underwriting standards employed for consumer loans include a determination of   
the applicant's payment history on other debts and an assessment of the         
borrower's ability to meet payments on the proposed loan along with his existing
obligations. In addition to the creditworthiness of the applicant, the          
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount. Unsecured personal loans are made 
to borrowers for a variety of personal needs and are usually limited to 20% of  
the borrower's net worth not to exceed $15,000, with a minimum loan amount of   
$2,500.                                                                         

 Consumer loans may entail greater risk than residential mortgage loans,
particularly in the case of consumer loans which are unsecured or secured by    
rapidly depreciable assets such as automobiles. In such cases, any repossessed  
collateral for defaulted consumer loans may not provide adequate sources of     
repayment for the outstanding loan balances as a result of the greater          
likelihood of damage, loss or depreciation. In addition, consumer loan          
collections are dependent on the borrower's continuing financial stability, and 
thus are more likely to be affected by adverse personal circumstances.          
Furthermore, the application of various federal and state laws, including       
federal and state bankruptcy and insolvency laws, may limit the amount which can
be recovered on such loans. At December 31, 2001, $106,000, or approximately    
1.96% of the consumer loan portfolio, was 60 days or more delinquent. There can 
be no assurance that delinquencies will not increase in the future.             

     COMMERCIAL BUSINESS LENDING. We maintain a portfolio of commercial business
loans to increase the yield and interest rate sensitivity of our loan portfolio 
and to satisfy the demand for financial services in our primary market area.    
Unlike residential mortgage loans, which generally are made on the basis of the 
borrower's ability to make repayment, and which are secured by real property    
whose value tends to be more easily ascertainable, commercial business loans are
generally of higher risk and typically are made on the                          

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basis of the borrower's ability to make repayment from the cash flow of the     
borrower's business. As a result, the availability of funds for the repayment of
commercial business loans may be substantially dependent on the success of the  
business itself (which, in turn, may be dependent upon the general economic     
environment).                                                                   

 During the past five years, we have originated and purchased commercial
business loans to businesses such as small retail operations, small             
manufacturing concerns and professional firms. Included in commercial business  
loans as of December 31, 2001 were $5.9 million of purchased loans all of which 
were made to borrowers located outside of our market area. Our commercial       
business loans almost always include personal guarantees and are usually, but   
not always, are at least partially secured by business assets, such as accounts 
receivable, equipment, inventory and real estate. However, the collateral       
securing the loans may depreciate over time, may be difficult to appraise and   
may fluctuate in value based on the success of the business.                    

     Most of our commercial business loans have terms ranging from six months to
five years and carry adjustable interest rates. The underwriting process for    
commercial business loans generally includes consideration of the borrower's    
financial statements, tax returns, projections of future business operations and
inspection of the subject collateral, if any.                                   

   Since 1995, we have purchased seasoned commercial leases covering various
types of office/commercial equipment from another financial institution with    
expertise in originating and acquiring such leases. As of December 31, 2001, the
outstanding balance on these leases was $3.9 million. In general, the leases are
full-payout finance leases in which the lease payments effectively repay the    
lessor for the purchase price of the equipment, plus an acceptable yield. The   
selling institution continues to service the leases for us and provides limited 
recourse in the event of a default by the lessor. We purchased these leases     
because they were available at relatively high yields at a time when investment 
alternatives were generating much lower yields and because they had relatively  
short terms, consistent with our asset/liability management strategy. Although, 
like other commercial business financings, commercial leases involve higher risk
than residential mortgage loans, management believes that these purchases have  
been prudent in furtherance of our lending strategy and in light of the higher  
yields, the personal guarantees on most of the leases and the limited additional
credit recourse provided by the seller. These leases are classified as loans for
financial statement purposes. As of December 31, 2001, all of such leases were  
performing in accordance with their terms.                                      

 The Company has also recently begun purchasing accounts receivable from
certain merchants. These assets are classified as "other assets." See Note 9 of 
the Notes to Consolidated Financial Statements.                                 

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   The following table sets forth the Company's commercial business loans as
of December 31, 2001.                                                           

                                  PERCENT OF
TYPE                         AMOUNT            PORTFOLIO            
----                         ------            ---------            
                  (Dollars in Thousands)
Equipment leases                   $3,927              35.86%                   
Accounts Receivable                $2,000              18.26%                   
Other                              $5,024              45.88%                   
               -------             -------
Total                             $10,951             100.00%                   
               =======             =======

ORIGINATIONS, PURCHASES AND SALES OF LOANS                                      

 We originate real estate and other loans through marketing efforts, our
customer base, walk-in customers and referrals from real estate brokers and     
builders. In addition, we occasionally utilize the services of mortgage brokers.

We purchase loans from third parties to supplement loan production. In
particular, we may purchase loans of a type which are not available or available
with as favorable terms in our own market area. We generally use the same       
underwriting standards in evaluating loan purchases as we do in originating     
loans. We will continue to evaluate loan purchase opportunities as they arise   
and make purchases in the future depending on market conditions. At December 31,
2001, approximately $40.5 million of the loan portfolio was serviced by others  
and we did not service any loans for others.                                    

   Our ability to originate large dollar volumes of real estate loans may be
substantially reduced or restricted in periods of rising interest rates, with a 
resultant decrease in related fee income and operating earnings.                

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The following table shows our loan origination, purchase, sale and    
repayment activities for the periods indicated.                                 

                                           Year Ended December 31,
                                         ---------------------------------
                                          2001        2000        1999
                                         ---------------------------------
                                          (In thousands)
Originations by type:                                                           
--------------------                                                            
Adjustable rate:                                                                
Real estate - one- to four-family.......   $     928   $   2,486   $   2,463  
            - multi-family............          --         128          --
            - non-residential.........         186          --         410
            - construction............          --          --          --
            - land....................         615         928          --
Non-real estate - consumer..............       4,171       4,615       4,013  
            - commercial business.....       2,817         842       2,814
                                         ---------   ---------   ---------
     Total adjustable-rate............       8,717       8,999       9,700
                                         ---------   ---------   ---------
Fixed rate:                                                                     
Real estate - one- to four-family.......      16,590       7,439       9,866  
            - multi-family............         240          --         344
            - non-residential.........         290       1,885       2,748
            - construction............         180         351       1,110
            - land....................         150         132          --
Non-real estate - consumer..............       1,693       2,450       1,540  
            - commercial business.....       1,966         654          --
                                         ---------   ---------   ---------
     Total fixed-rate.................      21,109      12,911      15,608
                                         ---------   ---------   ---------
     Total loans originated...........      29,826      21,910      25,308
                                         ---------   ---------   ---------

Purchases:                                                                      
---------                                                                       
Real estate - one- to four-family........       3,468       3,078(1)   20,408(1)
           - multi-family.............          --          --          --
           - non-residential..........       2,167         150         510
           - construction.............       1,430       1,557       2,910
Non-real estate - consumer...............          --          --          --   
           - commercial business......       6,455(2)    1,981         284
                                         ---------   ---------   ---------
    Total loans purchased.............      13,520       6,766      24,112
                                         ---------   ---------   ---------
    Total additions...................      43,346      28,676      49,420
                                         ---------   ---------   ---------

    Total loans sold..................          --          --          --
Principal repayments.....................      40,159      22,831      32,297   
                                         ---------   ---------   ---------
    Net before other items............       3,187       5,845      17,123
                             ---------   ---------
Increase(decrease) in other items, net...      (1,156)        727        (975)  
                                         ---------   ---------   ---------
      Net increase....................   $   2,031   $   6,572   $  16,148
                                         =========   =========   =========
-----------                                                                     

(1)  Consisted primarily of conforming adjustable rate mortgage's secured by    
one-to-four family properties located out of our market area.         
(2)  Consisted of $2.0 million o f accounts receivable loans with the balance   
consisting of equipment leases.                                       

DELINQUENCIES AND NON-PERFORMING ASSETS                                         

     DELINQUENCY PROCEDURES. When a borrower fails to make a required payment on
a loan, we attempt to cause the delinquency to be cured by contacting the       
borrower. In the case of loans, a late notice is sent on all loans over 30 days 
delinquent. Another late notice along with any required demand letters as set   
forth in the loan contract are sent 60 days after the due date. Additional      
written and verbal contacts are made with the borrower between 45 and 90 days   
after the due date.                                                             

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   If the delinquency is not cured by the 90th day, the customer is normally
provided 10 days written notice that the account will be referred to counsel for
collection and foreclosure, if necessary. A drive-by appraisal is normally      
obtained at this time and a title search is ordered. A good faith effort by the 
borrower at this time will defer foreclosure for a reasonable length of time    
depending on individual circumstances. We may agree to accept a deed in lieu of 
foreclosure. If it becomes necessary to foreclose, the property is sold at      
public sale and we may bid on the property to protect its interest. The decision
to foreclose is made by the Senior Loan Officer after discussion with the       
members of the Loan Committee.                                                  

Consumer loans are charged off if they remain delinquent for 120 days 
unless the borrower and lender agree on a payment plan. If terms of the plan are
not met, they are then subject to charge off. Our procedure for repossession and
sale of consumer collateral are subject to various requirements under Indiana   
consumer protection laws.                                                       

   When we acquire real estate as a result of foreclosure or by deed in lieu
of foreclosure it is classified real estate owned until it is sold. The real    
estate is recorded at the lower of cost or estimated fair value, less estimated 
selling costs, at the date of acquisition, and any write-down resulting         
therefrom is charged to the allowance for loan losses. Subsequent decreases in  
the value of the property are charged to operations through the creation of a   
valuation allowance. After acquisition, all costs incurred in maintaining the   
property are expensed. Costs relating to the development and improvement of the 
property, however, are capitalized to the extent of estimated fair value less   
estimated costs to sell.                                                        

  LOAN DELINQUENCIES. The following table sets forth loan delinquencies by
type, by amount and by percentage of type at December 31, 2001.                 

                                                        [Enlarge/Download Table]

                                                  Loans Delinquent For:                                                      
                           ------------------------------------------------------------------                                
                                       60-89 Days                     90 Days and Over             Total Delinquent Loans    
                           --------------------------------------------------------------------------------------------------
                                                   Percent                          Percent                         Percent  
                                                   of Loan                          of Loan                          of Loan 
                             Number    Amount     Category    Number    Amount     Category     Number    Amount    Category 
                           --------------------------------------------------------------------------------------------------
                                                                 (Dollars in Thousands)                                      
Real Estate:                                                                                                                 
                                                                                                                             
  One- to four-family......    5       $ 281        0.34%        9     $  743        0.90%       14      $ 1,024      1.24%  
  Non-residential..........    -           -           -         1        463        4.04         1          463      4.04   
Consumer...................    5          57        1.05         5         49        0.91        10          106      1.96   
Commercial business........    3         587        5.36         -          -           -         3          587      5.36   
                             ---       -----       -----       ---     ------       -----      ----      -------             
     Total.................   13       $ 925        0.79%       15     $1,255        1.07%       28      $ 2,180      1.86%  
                             ===       =====       =====       ===     ======       =====      ====      =======             

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  CLASSIFIED ASSETS. Federal regulations provide for the classification of
loans and other assets, such as debt and equity securities considered by the    
Office of Thrift Supervision (the "OTS") to be of lesser quality, as            
"substandard," "doubtful" or "loss." An asset is considered "substandard" if it 
is inadequately protected by the current net worth and paying capacity of the   
obligor or of the collateral pledged, if any. "Substandard" assets include those
characterized by the "distinct possibility" that the insured institution will   
sustain "some loss" if the deficiencies are not corrected. Assets classified as 
"doubtful" have all of the weaknesses inherent in those classified              
"substandard," with the added characteristic that the weaknesses present make   
"collection or liquidation in full," on the basis of currently existing facts,  
conditions, and values, "highly questionable and improbable." Assets classified 
as "loss" are those considered "uncollectible" and of such little value that    
their continuance as assets without the establishment of a specific loss reserve
is not warranted. Assets which do not currently expose the insured institution  
to sufficient risk to warrant classification in one of the aforementioned       
categories but possess weaknesses are placed on a "watch list" by our           
management.                                                                     

     When an insured institution classifies problem assets as either substandard
or doubtful, it may establish general allowances in an amount deemed prudent by 
management to cover probable accrued losses. General allowances represent loss  
allowances which have been established to cover probable accrued losses         
associated with lending activities, but which, unlike specific allowances, have 
not been allocated to particular problem assets. When an insured institution    
classifies problem assets as "loss," it is required either to establish a       
specific allowance for losses equal to 100% of that portion of the asset so     
classified or to charge-off such amount. An institution's determination as to   
the classification of its assets and the amount of its valuation allowances is  
subject to review by the regulatory authorities, who may order the establishment
of additional general or specific loss allowances.                              

   In connection with the filing of our periodic reports with the OTS and in
accordance with our classification of assets policy, we regularly review the    
problem loans in our portfolio to determine whether any loans require           
classification in accordance with applicable regulations. On the basis of this  
review of our assets, at December 31, 2001, we had classified the following     
assets:                                                                         

One- to Four-                       
                    Family       Construction     Consumer       Total
                --------------------------------------------------------
                (In Thousands)

Substandard.........    $   934         $   393         $   49     $  1,376     
Doubtful............         --              --             --           --     
Loss................         --              70(1)          --           70     
                   -------         -------         ------     --------
                   $   934         $   463         $   49     $  1,446
                   =======         =======         ======     ========

 (1) The Bank has established a specific reserve for this portion of the
non-residential loan. The balance of the loan is classified as
substandard. See "-Multi-Family and Non-Residential Lending". 

Our classified assets consist of the (i) non-performing loans and (ii)
loans and other assets of concern discussed herein. As of the date hereof, these
asset classifications are consistent with those of the OTS and the FDIC.        

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NON-PERFORMING ASSETS. The following table sets forth the amounts and 
categories of non- performing assets in our loan portfolio. Loans are reviewed  
quarterly and any loan whose collectibility is doubtful is placed on non-accrual
status. Loans are placed on non-accrual status when either principal or interest
is 90 days or more past due, unless, in the judgment of management, the loan is 
well collateralized and in the process of collection. Interest accrued and      
unpaid at the time a loan is placed on non-accrual status is charged against    
interest income. Subsequent payments are either applied to the outstanding      
principal balance or recorded as interest income, depending on the assessment of
the ultimate collectibility of the loan. For all years presented, we have had no
troubled debt restructurings (which involved forgiving a portion of interest or 
principal on any loans or making loans at a rate materially less than that of   
market rates). Foreclosed assets include assets acquired in settlement of loans.
Except as noted, the loans and foreclosed asset amounts shown are stated without
giving effect to the specific reserves which have been established against such 
assets. See "- Loan Loss Reserve Analysis."                                     

                                December 31,
                               -------------------------------------------
                                2001     2000     1999     1998     1997
                               -------------------------------------------
                                      (Dollars in Thousands)
Non-accruing loans:                                                             
One- to four-family..........   $   743  $   465  $   282  $   314  $   263 
Multi-family.................        --       --       --       --       -- 
Non-residential..............       463       --       --       --       -- 
Construction.................        --      556      479       --       -- 
Consumer.....................        49       67       11      161       45 
Commercial business..........        --       --      157       --       -- 
                               -------  -------  -------  -------  -------
  Total.....................     1,255    1,088      929      475      308
                               -------  -------  -------  -------  -------
Accruing loans delinquent                                                       
more than 90 days:                                                            
Consumer.....................        --       --       --        8       -- 
                               -------  -------  -------  -------  -------
  Total.....................        --       --       --        8       --
                               -------  -------  -------  -------  -------
Foreclosed assets:                                                              
One- to four-family..........       191       --       --       23       27 
Multi-family.................        --       --       --       --       -- 
Non-residential..............        --       --       --       --       -- 
Construction.................        --       --       --       --       -- 
Consumer.....................        --       --       --       --       -- 
Commercial business..........        --       --       --       --       -- 
                               -------  -------  -------  -------  -------
  Total.....................       191       --       --       23       27
                               -------  -------  -------  -------  -------
Total non-performing assets....   $ 1,446  $ 1,088  $   929  $   506  $   335   
                               =======  =======  =======  =======  =======
Total as a percentage of                                                        
total assets.................     1.02%    0.80%    0.73%    0.43%   0.34%  

 For the year ended December 31, 2001, gross interest income which would
have been recorded had the non-accruing loans been current in accordance with   
their original terms amounted to $54,000.                                       

  At December 31, 2001, there were no other loans that is not disclosed on
the table or discussed above, where known information about the possible credit 
problems of borrowers caused us to have serious doubts as to the ability of the 
borrowers to comply with present loan repayment terms and which may result in   
disclosure of such loans in the future.                                         

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 ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established
through a provision for loan losses based on our evaluation of the probable     
losses in our loan portfolio and changes in the nature and volume of our loan   
activity. Such evaluation, which includes a review of all loans for which full  
collectibility may not be reasonably assured, considers among other matters, the
estimated fair value of the underlying collateral, economic conditions,         
historical loan loss experience and other factors that warrant recognition in   
providing for an adequate loan allowance. Although we believe we use the best   
information available to make such determinations, future adjustments to the    
allowance may be necessary, and net income could be significantly affected if   
circumstances differ substantially from the assumptions used in making the      
initial determinations. At December 31, 2001, we had an allowance for loan      
losses of $766,000.                                                             

      The following table sets forth an analysis of the allowance for loan
losses.                                                                         

                                Year Ended December 31
                               -------------------------------------------
                                2001     2000     1999     1998     1997
                               -------------------------------------------
                              (Dollars in Thousands)

Balance at beginning of period..  $   701  $   591  $   507  $   410  $   355   
                               -------  -------  -------  -------  -------
Charge-offs:                                                                    
One- to four-family...........       38       --       --       --       -- 
Multi-family..................       --       --       --       --       -- 
Non-residential...............       28       --       --       --       -- 
Construction..................       --       --       --       --       -- 
Consumer......................       29       18       40        5       33 
Commercial business...........       --       --       --       --       -- 
                               -------  -------  -------  -------  -------
      Total charge-offs......       95       18       40        5       33
                               -------  -------  -------  -------  -------
Recoveries:                                                                     
One- to four-family...........       --       --       --       --       -- 
Multi-family..................       --       --       --       --       -- 
Non-residential...............       --       --       --       --       -- 
Construction..................       --       --       --       --       -- 
Consumer......................        8        4        5       --       14 
Commercial business...........       --       --       --       --       -- 
                               -------  -------  -------  -------  -------
     Total recoveries........        8        4        5       --       14
                               -------  -------  -------  -------  -------

Net charge-offs.................      (87)     (14)     (35)      (5)     (19)  
Additions charged to                                                            
operations....................      152      124      119      102       74 
                               -------  -------  -------  -------  -------
Balance at end of period........  $   766  $   701  $   591  $   507  $   410   
                               =======  =======  =======  =======  =======
Ratio of net charge-offs                                                        
during the period to average                                                  
loans outstanding during the                                                  
period.........................    0.08%    0.01%    0.04%    0.01%    0.03%  
                               =======  =======  =======  =======  =======
Ratio of net charge-offs                                                        
during the period to average                                                  
non-performing assets..........    7.87%    1.37%    4.62%    1.70%    4.15%  
                               =======  =======  =======  =======  =======

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    The distribution of the allowance for losses on loans at the dates
indicated is summarized as follows:                                             

                                                        [Enlarge/Download Table]

                                                  December 31,                        
                       ---------------------------------------------------------------
                                      2001                            2000            
                       ---------------------------------------------------------------
                                               Percent                        Percent 
                                               of Loans                       of Loans
                                      Loan     in Each                Loan    in Each 
                         Amount of  Amounts    Category  Amount of   Amounts  Category
                         Loan Loss     by      to Total  Loan Loss     by     to Total
                         Allowance  Category     Loans   Allowance  Category    Loans 
                         -------------------------------------------------------------
                                             (Dollars In Thousands)                   
                                                                                      
One- to four-family ..   $    195   $ 82,461    70.53%   $    154   $ 84,349    74.09%
Multi-family .........          7      2,297     1.96           7      2,189     1.92 
Non-residential ......        160     11,469     9.81          29     10,156     8.92 
Construction and land          11      4,327     3.71         236      5,895     5.18 
Consumer .............         54      5,404     4.62          61      5,881     5.17 
Commercial business ..        114     10,951     9.37          47      5,377     4.72 
Unallocated ..........        225         --       --         167         --       -- 
                         --------   --------   ------    --------   --------   ------ 
     Total ...........   $    766   $116,909   100.00%   $    701   $113,847   100.00%
                         ========   ========   ======    ========   ========   ====== 
                                                        [Enlarge/Download Table]

                                                                December 31,                                        
                       -------------------------------------------------------------------------------------------- 
                                    1999                            1998                          1997              
                       -------------------------------------------------------------------------------------------- 
                                             Percent                        Percent                        Percent  
                                             of Loans                       of Loans                       of Loans 
                                    Loan     in Each                Loan    in Each                Loan    in Each  
                       Amount of  Amounts    Category  Amount of   Amounts  Category  Amount of   Amounts  Category 
                       Loan Loss     by      to Total  Loan Loss     by     to Total  Loan Loss     by     to Total 
                       Allowance  Category     Loans   Allowance  Category    Loans   Allowance  Category    Loans  
                       -------------------------------------------------------------------------------------------- 
                                                           (Dollars In Thousands)                                   
                                                                                                                    
One- to four-family .. $    125   $ 82,210    76.11%   $    110   $ 63,369    69.69%   $     97   $ 51,567    64.71%
Multi-family .........        7      2,144     1.98          12      2,446     2.69          12      4,010     5.03 
Non-residential ......       26      8,775     8.12          26     10,370    11.40          25      8,376    10.51 
Construction and land       136      4,911     4.55          19      3,749     4.12          28      5,714     7.18 
Consumer .............       46      4,981     4.61          71      5,392     5.93          45      5,104     6.40 
Commercial business ..       74      4,999     4.63          56      5,607     6.17          49      4,916     6.17 
Unallocated ..........      177         --       --         212         --       --         154         --       -- 
                       --------   --------   ------    --------   --------   ------    --------   --------   ------ 
     Total ........... $    591   $108,020   100.00%   $    506   $ 90,933   100.00%   $    410   $ 79,687   100.00%
                       ========   ========   ======    ========   ========   ======    ========   ========   ====== 

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INVESTMENT ACTIVITIES                                                           

  Most of our investments consist of U.S. Government and agency securities
with maturities of five years or less, mortgage backed securities and short term
assets. We also invest, to a limited degree, in municipal securities, mutual    
funds and equity securities of other financial companies. At December 31, 2001, 
we did not own any securities of a single issuer which exceeded 10% of our      
retained earnings, other than U.S. government or federal agency obligations. See
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations - Liquidity and Capital Resources" in the Annual Report.             

    INVESTMENT SECURITIES. At December 31, 2001, investment securities totaled
$5.7 million, or 4.02% of total assets. Included in this amount is $1.6 million 
investment in Federal Home Loan Bank ("FHLB") stock which is required for       
membership in the FHLB of Indianapolis. It is our general policy to purchase    
investment securities which are U.S. Government securities or federal agency    
obligations or other issues that are rated investment grade or have credit      
enhancements. At December 31, 2001, the average term to maturity or repricing of
the investment portfolio was 2.2 years.                                         

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     The following table sets forth the composition of our investment securities
at the dates indicated.                                                         

                                                        [Enlarge/Download Table]

                                                                             December 31,                             
                                                 -------------------------------------------------------------------- 
                                                          2001                   2000                   1999          
                                                 -------------------------------------------------------------------- 
                                                    Book       % of        Book        % of        Book        % of   
                                                    Value      Total       Value       Total       Value       Total  
                                                 -------------------------------------------------------------------- 
                                                                        (Dollars in Thousands)                        
                                                                                                                      
Investment securities held to maturity:                                                                               
  FHLB stock....................................  $ 1,624       28.54%    $ 1,624       25.03%    $ 1,383      16.00% 
                                                  -------     -------     -------     -------     -------     ------- 

Investment securities available for sale:                                                                             
  U.S. government securities....................    3,221       56.61       3,680       56.72       5,124       59.28 
  Municipal obligations.........................      102        1.79         101        1.56          94        1.09 
  Government securities mutual fund.............      160        2.81         147        2.26         134        1.55 
                                                  -------     -------     -------     -------     -------     ------- 
                                                    3,483       61.21       3,928       60.54       5,352       61.92 
                                                  -------     -------     -------     -------     -------     ------- 

Trading Securities:                                                                                                   
  Thrift common stock mutual fund...............       --          --          --          --         965       11.16 
  Common stock of other financial institutions..      483        8.49         855       13.18         857        9.91 
  Corporate debt securities.....................      100        1.76          81        1.25          87        1.01 
                                                  -------     -------     -------     -------     -------     ------- 
                                                      583       10.25         936       14.43       1,909       22.08 
                                                  -------     -------     -------     -------     -------     ------- 
     Total investment securities................  $ 5,690      100.00%    $ 6,488      100.00%    $ 8,644      100.00%
                                                  =======     =======     =======     =======     =======     ======= 

Average remaining life of debt investment                                                                             
 securities.....................................       2.2 years               2.9 years               3.2 years      

Other interest-earning assets:                                                                                        
  Interest-bearing deposits with banks..........    6,410      100.00%      1,085      100.00%      1,278      100.00%
     Total......................................  $ 6,410      100.00%    $ 1,085      100.00%    $ 1,278      100.00%
                                                  =======     =======     =======     =======     =======     ======= 

The composition and maturities of the investment securities portfolio,
excluding FHLB stock and equity securities as of December 31, 2001, are         
indicated in the following table.                                               

                                                        [Enlarge/Download Table]

                                              Less Than    1 to 5      5 to 10       Over                                
                                               1 Year       Years       Years      10 Years   Total Investment Securities
                                             ----------  ----------  ----------   ----------  ---------------------------
                                             Book Value  Book Value  Book Value   Book Value   Book Value     Fair Value 
                                             ----------  ----------  ----------   ----------  ------------   ------------
                                                                      (Dollars in Thousands)                             
                                                                                                                         
U.S. government securities..................  $    764    $  2,457    $     --     $     --    $    3,221    $     3,221 
Municipal obligations.......................        --          --         102           --           102            102 
Corporate debt securities...................        --          --          --          100           100            100 
                                              --------    --------    --------     --------    ----------    ----------- 
Total investment securities (excluding                                                                                   
FHLB stock and equity securities)...........  $    764    $  2,457    $    102     $    100    $    3,423    $     3,423 
                                              ========    ========    ========     ========    ==========    =========== 

Weighted average yield......................     6.35%       5.54%       4.77%        8.95%         5.80%                

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 MORTGAGE-BACKED SECURITIES. We purchase mortgage-backed securities from
time to time to supplement residential loan production. The type of securities  
purchased is based upon our asset/liability management strategy and balance     
sheet objectives. See "Management's Discussion and Analysis of Financial        
Condition and Results of Operations - Asset/Liability Management" in the Annual 
Report. Our mortgage-backed securities are held in the available for sale       
portfolio in order to retain investment flexibility and accordingly are included
in our financial statements at fair value.                                      

   All of our mortgage-backed securities at December 31, 2001, are backed by
federal agencies or government corporations. Accordingly, we believe that the   
mortgage-backed securities are generally resistant to credit problems.          

The following table sets forth the composition of our mortgage-backed 
securities at the dates indicated.                                              

                                December 31,
                                ----------------------------------------------
                              2001            2000            1999
                                ----------------------------------------------
                              Book    % of    Book    % of    Book    % of
                               Value   Total   Value   Total   Value   Total
                                ----------------------------------------------
                                (Dollars in Thousands)
Mortgage-backed securities                                                      
available for sale:                                                           
 GNMA.........................  $  726   24.02  $  984   28.74  $  374   20.02
 FNMA.........................      32    1.06      35    1.02      41    2.20
 FHLMC........................   2,265   74.92   2,405   70.24   1,453   77.78
                                 -----  ------  ------  ------  ------  ------
Total mortgage-backed                                                 
       securities..............  $3,023  100.00% $3,424  100.00% $1,868  100.00%
                                ======  ======  ======  ======  ======  ======

    The following table shows mortgage-backed and related securities, sale and
repayment activities for the periods indicated. There were no mortgage-backed   
securities purchases during such periods.                                       

                                               Year Ended December 31,
                                             -----------------------------
                                              2001       2000       1999
                                             -----------------------------
                                            (Dollars in Thousands)
Purchases:                                                                      
---------                                                                       
Adjustable-rate............................   $    --    $    --    $    -- 
Fixed-rate.................................       493      2,264         -- 
                                             -------    -------    -------
      Total purchases.....................       493      2,264         --
                                             -------    -------    -------

Sales and Repayments:                                                           
--------------------                                                            
      Total sales.........................        --        364         --
                                             -------    -------    -------
Principal repayments.......................       948        360        720 
                                             -------    -------    -------
       Total reductions....................      (948)      (724)      (720)
Increase (decrease) in other items, net....        54         16        (61)
                                             -------    -------    -------
       Net increase (decrease).............   $  (401)   $ 1,556    $  (781)
                                             =======    =======    =======

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The following table sets forth the contractual maturities of our      
mortgage-backed securities at December 31, 2001. These securities are           
anticipated to be repaid well in advance of their contractual maturities as a   
result of mortgage loan payments. The amounts set forth below represent         
principal balances only and do not include premiums, discounts and fair value   
adjustments.                                                                    

                                                           December 31, 2001
                               Due in                      Balance Outstanding
                   -------------------------------------------------------------
1 to     5 to 10   10 to 20  Over 20
                    5 Years    Years      Years    Years    Fixed   Adjustable
                   -------------------------------------------------------------

                                (Dollars in Thousands)

GNMA...............  $   --    $   --    $   --    $  713    $  713    $   --   
FNMA...............      --        --        32        --        --        32   
FHLMC..............      43       952        --     1,230     2,225        --   
                  ------    ------    ------    ------    ------    ------

  Total.........  $   43    $  952    $   32    $1,943    $2,938    $   32
                  ======    ======    ======    ======    ======    ======

SOURCES OF FUNDS                                                                

 Our primary sources of funds are deposits, borrowings, amortization and
prepayment of loan principal, maturities of investment securities, short-term   
investments and funds provided from operations.                                 

  DEPOSITS. American Savings offers a variety of deposit accounts having a
wide range of interest rates and terms. The deposits consist of passbook        
accounts, demand and NOW accounts, and money market and certificate accounts. We
rely primarily on advertising, competitive pricing policies and customer service
to attract and retain these deposits.                                           

The flow of deposits is influenced significantly by general economic  
conditions, changes in money market and prevailing interest rates and           
competition. The variety of deposits we offer by have allowed us to be          
competitive in obtaining funds and to respond with flexibility to changes in    
consumer demand. We have become more susceptible to short-term fluctuations in  
deposit flows, as customers have become more interest rate conscious. We manage 
the pricing of our deposits in keeping with our asset/liability management,     
profitability and growth objectives. Based on our experience, we believe that   
passbook, demand and NOW accounts are relatively stable sources of deposits as  
compared to certificate deposits. However, our ability to attract and maintain  
all deposits, and the rates paid on these deposits, has been and will continue  
to be significantly affected by market conditions.                              

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The following table sets forth the savings flows during the periods   
indicated.                                                                      

                               Year Ended December 31,
                               -----------------------------------
                           2001         2000          1999
                               -----------------------------------
                              (Dollars in Thousands)

Opening balance..................     $  89,712    $  88,945    $  78,997       
Deposits.........................       196,760      190,652      171,722       
Withdrawals......................      (188,387)    (193,386)    (164,716)      
Interest credited................         4,125        3,501        2,942       
                               ---------    ---------    ---------

Ending balance...................     $ 102,210    $  89,712    $  88,945       
                               =========    =========    =========

Net increase.....................     $  12,498    $     767    $   9,948       
                               =========    =========    =========

Percent increase.................        13.93%        0.86%       12.59%       
                               =========    =========    =========

     The following table sets forth the dollar amount of savings deposits in the
various types of deposit programs we offer as of the dates indicated.           

                                                        [Enlarge/Download Table]

                                                                             December 31,                                
                                             --------------------------------------------------------------------------- 
                                                       2000                      2000                      1999          
                                             --------------------------------------------------------------------------- 
                                                           Percent                   Percent                   Percent   
                                               Amount      of Total      Amount      of Total      Amount      of Total  
                                             --------------------------------------------------------------------------- 
                                                                        (Dollars in Thousands)                           
Transactions and Savings Deposits:                                                                                       
---------------------------------                                                                                        
                                                                                                                         
Commercial Demand (0.00%(1))................ $    1,486         1.45%  $    1,198         1.34%  $    1,229         1.38%
Passbook Accounts (2.75%(1))................     15,351        15.02       14,097        15.71       14,960        16.82 
NOW Accounts (1.50%(1)).....................      7,845         7.68        6,820         7.60        7,375         8.29 
Money Market Accounts (2.50%(1))............      5,345         5.23        2,852         3.18        3,372         3.79 
                                             ----------   ----------   ----------   ----------   ----------   ---------- 

Total Non-Certificates......................     30,027        29.38       24,967        27.83       26,936        30.28 
                                             ----------   ----------   ----------   ----------   ----------   ---------- 

Certificates:                                                                                                            
------------                                                                                                             
 1.01 - 3.00%...............................      7,790         7.62                                                     
 3.01 - 4.00%...............................     12,471        12.20                                                     
 4.01 - 5.00%...............................     21,948        21.47        3,917         4.37       17,354        19.51 
 5.01 - 6.00%...............................     10,664        10.43       20,819        23.21       42,042        47.27 
 6.01 - 7.00%...............................     18,712        18.31       38,784        43.23        2,507         2.82 
 7.01 - 9.00%...............................        598         0.59        1,225         1.36          106         0.12 
                                             ----------   ----------   ----------   ----------   ----------   ---------- 

Total Certificates..........................     72,183        70.62       64,745        72.17       62,009        69.72 
                                             ----------   ----------   ----------   ----------   ----------   ---------- 
Total Deposits.............................. $  102,210       100.00%  $   89,712       100.00%  $   88,945       100.00%
                                             ==========   ==========   ==========   ==========   ==========   ========== 

-----------------------                                                         
(1)      Rates in effect at December 31, 2001.                                  

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The following table shows rate and maturity information for our       
certificates of deposit as of December 31, 2001.                                

                                                        [Enlarge/Download Table]

                                  1.01-       3.01-       4.01-       5.01-       6.01-                  Percent 
                                  3.00%       4.00%       5.00%       6.00%       9.00%       Total      of Total
                                 ------------------------------------------------------------------------------- 
                                                                     (Dollars in Thousands)                      
Certificate account maturing in                                                                                  
  quarter ending:                                                                                                

                                                                                                                 
March 31, 2002.................  $ 1,528     $ 3,722     $ 1,924     $ 6,671     $ 7,931     $21,776      30.17% 
June 30, 2002..................    2,541       1,639       5,952       1,026       7,046      18,204       25.22 
September 30, 2002.............    1,707       2,394       9,329         856       3,005      17,291       23.95 
December 31, 2002..............      489       3,315       1,904         725         280       6,713        9.30 
March 31, 2003.................      630         123       2,110         338         168       3,369        4.67 
June 30, 2003..................       75         579          57         328          85       1,124        1.56 
September 30, 2003.............      466          23          30         156         195         870        1.20 
December 31, 2003..............      354         321         116          54         206       1,051        1.46 
March 31, 2004.................       --           6         126         160          --         292        0.40 
June 30, 2004..................       --          66         144          50          69         329        0.46 
September 30, 2004.............       --           2          96          54           7         159        0.22 
December 31, 2004..............       --          82          --          --         278         360        0.50 
Thereafter.....................       --         199         160         246          40         645        0.89 
                                 -------     -------     -------     -------     -------     -------     ------- 

   Total.......................  $ 7,790     $12,471     $21,948     $10,664     $19,310     $72,183     100.00% 
                                 =======     =======     =======     =======     =======     =======     ======= 

   Percent of total............   10.79%      17.28%      30.41%      14.77%      26.75%     100.00%             
                                 =======     =======     =======     =======     =======     =======             

     The following table indicates the amount of our certificates of deposit and
other deposits by time remaining until maturity as of December 31, 2001.        

                                Maturity
                             -----------------------------------------------
                   Over     Over
                 3 Months   3 to 6   6 to 12    Over
                             or Less   Months   Months   12 months   Total
                             -----------------------------------------------
                              (Dollars in Thousands)
Certificates of deposit less                                                    
than $100,000............... $17,451   $14,382   $18,880   $ 6,923   $57,636

Certificates of deposit of                                                      
$100,000 or more............   4,325     3,822     5,124     1,276   $14,547
                             -------   -------   -------   -------   -------
Total certificates of deposit. $21,776   $18,204   $24,004   $ 8,199   $72,183  
                             =======   =======   =======   =======   =======

       BORROWINGS. We may obtain advances from the Federal Home Loan Bank of
Indianapolis upon the security of our capital stock in the Federal Home Loan    
Bank of Indianapolis and certain of our mortgage loans and mortgage-backed      
securities. Such advances may be made pursuant to several different credit      
programs, each of which has its own interest rate and range of maturities. At   
December 31, 2001, we had $24.0 million in Federal Home Loan Bank advances      
outstanding. During recent years, we have utilized short-term borrowings, most  
of which had maturities of 12 to 36 months in order to fund loan demand. See    
"Management Discussion and Analysis - Asset/Liability Management" in the Annual 
Report.                                                                         

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  The following table sets forth the maximum month-end balance and average
balance of Federal Home Loan Bank advances, securities sold under agreements to 
repurchase and other borrowings for the periods indicated.                      

                                             Year Ended December 31,
                                            ------------------------------
                                            2001      2000      1999
                                            ------------------------------
                                          (Dollars in Thousands)
Maximum Balance:                                                                
---------------                                                                 
FHLB advances................................ $31,108   $31,108   $25,676   
Securities sold under agreements                                            
to repurchase..............................     ---       ---       --- 
Other borrowings.............................     ---       ---       ---   

Average Balance:                                                                
---------------                                                                 
FHLB advances................................ $27,231   $24,398   $23,051   
Securities sold under agreements                                            
to repurchase..............................     ---       ---       --- 
Other borrowings.............................     ---       ---       ---   

    The following table sets forth certain information as to our borrowings at
the dates indicated.                                                            

                                            December 31,
                                            ------------------------------
                                            2001      2000      1999
                                            ------------------------------
                                            (Dollars in Thousands)

Federal Home Loan Bank advances................ $23,956   $31,108   $24,676     
Securities sold under agreements                                                
to repurchase................................      --        --        --   
Other borrowings...............................      --        --        --     
                                           -------   -------   -------
Total borrowings.......................... $23,956   $31,108   $24,676
                                           =======   =======   =======

Weighted average interest rate                                                  
of Federal Home Loan Bank advances...........   5.01%     6.08%     5.67%   

Weighted average interest rate of                                               
securities sold under agreements to                                         
repurchase...................................      --        --        --   

Weighted average interest rate of                                               
other borrowings.............................      --        --        --   

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SERVICE CORPORATIONS                                                            

   We have one wholly owned subsidiary service corporation, NIFCO, Inc., and
one second tier subsidiary service corporation, Ridge Management, Inc. which is 
owned by NIFCO. NIFCO sells annuities and securities. At December 31, 2001, we  
had an equity investment in NIFCO of $29,000. For the year ended December 31,   
2001, NIFCO recorded a net loss of $4,000. In the past, Ridge Management engaged
in lending and investment activity, although it is currently essentially        
inactive. For the year ended December 31, 2001, Ridge Management had no         
activity.                                                                       

REGULATION                                                                      

     American Savings is a federally chartered savings and loan association, the
deposits of which are federally insured and backed by the full faith and credit 
of the United States Government. Accordingly, American Savings is subject to    
broad federal regulation and oversight extending to all of our operations.      
American Savings is a member of the Federal Home Loan Bank of Indianapolis and  
is subject to certain limited regulation by the Board of Governors of the       
Federal Reserve System. As the savings and loan holding company that has existed
as a unitary savings and loan holding company prior to May 4, 1999, there is    
virtually no restriction on its activities.                                     

FEDERAL REGULATION OF SAVINGS ASSOCIATIONS. The Office of Thrift      
Supervision has extensive authority over the operations of savings associations.
As part of this authority, we are required to file periodic reports with the    
Office of Thrift Supervision and are subject to periodic examinations by the    
Office of Thrift Supervision and the FDIC. When these examinations are conducted
by the Office of Thrift Supervision and the FDIC, the examiners may require     
American Savings to provide for higher general or specific loan loss reserves.  

   The Office of Thrift Supervision also has extensive enforcement authority
over all savings institutions and their holding companies, such as American     
Savings and AMB Financial. This enforcement authority includes, among other     
things, the ability to assess civil money penalties, to issue cease-and-desist  
or removal orders, and to initiate injunctive actions.                          

     Our general permissible lending limit for loans-to-one-borrower is equal to
the greater of $500,000 or 15% of unimpaired capital and surplus (except for    
loans fully secured by certain readily marketable collateral, in which case this
limit is increased to 25% of unimpaired capital and surplus). At December 31,   
2001, our lending limit under this restriction was approximately $1.5 million.  
At December 31, 2001, we had no loans in excess of our loans-to-one-borrower    
limit.                                                                          

INSURANCE OF ACCOUNTS AND REGULATION BY THE FDIC. As insurer, the FDIC
imposes deposit insurance premiums and is authorized to conduct examinations of,
and to require reporting by, FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by   
regulation or order to pose a serious risk to the Federal Home Loan Bank System 
or the Savings Association Insurance Fund. The FDIC also has the authority to   
initiate enforcement actions against savings associations, after giving the     
Office of Thrift Supervision an opportunity to take such action, and may        
terminate deposit insurance if it determines that the institution has engaged in
unsafe or unsound practices, or is in an unsafe or unsound condition.           

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 The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured depository institutions are placed into one of   
nine categories and assessed insurance premiums based upon their level of       
capital and supervisory evaluation. Under the system, institutions classified as
well capitalized (I.E., a core capital ratio of at least 5%, a ratio of core    
capital to risk-weighted assets of at least 6% and a risk-based capital ratio of
at least 10%) and considered healthy, pay the lowest premium while institutions 
that are less than adequately capitalized (I.E., core or risk-based capital     
ratios of less than 4% or a risk-based capital ratio of less than 8%) and       
considered of substantial supervisory concern pay the highest premium. Risk     
classification of all insured institutions is made by the FDIC semi-annually. At
December 31, 2001, American Savings met the criteria for a well-capitalized     
institution.                                                                    

The current premium schedule for Bank Insurance Fund and Savings      
Association Insurance Fund insured institutions range from 0 to 27 basis points.
However, Savings Association Insurance Fund insured institutions and Bank       
Insurance Fund insured institutions are required to pay a Financing Corporation 
assessment in order to fund the interest on bonds issued to resolve thrift      
failures in the 1980s. For the quarter ended December 31, 2001, this amount was 
equal to 1.84% basis points for each $100 in domestic deposits for Savings      
Association Insurance Fund members and Bank Insurance Fund insured institutions.
These assessments, which may be revised based upon the level of Bank Insurance  
Fund and Savings Association Insurance Fund deposits, will continue until the   
bonds mature in 2017.                                                           

  REGULATORY CAPITAL REQUIREMENTS. Federally insured savings associations,
such as American Savings, are required to maintain a minimum level of regulatory
capital. The Office of Thrift Supervision has established capital standards,    
including a tangible capital requirement, a leverage ratio (or core capital)    
requirement and a risk-based capital requirement applicable to such savings     
associations.                                                                   

The capital regulations require tangible capital of at least 1.5% of  
adjusted total assets (as defined by regulation). At December 31, 2001, American
Savings had tangible capital of $9.8 million, or 7.01% of adjusted total assets,
which is approximately $7.7 million above the minimum requirement of 1.5% of    
adjusted total assets in effect on that date. At December 31, 2001, American    
Savings did not have any intangible assets.                                     

    The capital standards also require core capital equal to at least 3% to 4%
of adjusted total assets, depending on an institution's supervisory rating. Core
capital generally consists of tangible capital. At December 31, 2001, we had    
core capital equal to $9.8 million, or 7.01% of adjusted total assets, which is 
$5.6 million above the minimum leverage ratio requirement of 3% as in effect on 
that date.                                                                      

  The Office of Thrift Supervision risk-based capital requirement requires
savings associations to have total capital of at least 8% of risk-weighted      
assets. Total capital consists of core capital, as defined above, and           
supplementary capital. Supplementary capital consists of certain permanent and  
maturing capital instruments that do not qualify as core capital and general    
valuation loan and lease loss allowances up to a maximum of 1.25% of            
risk-weighted assets. Supplementary capital may be used to satisfy the risk-    
based requirement only to the extent of core capital.                           

  In determining the amount of risk-weighted assets, all assets, including
certain off-balance sheet items, will be multiplied by a risk weight, ranging   
from 0% to 100%, based on the risk inherent in the type of asset. For example,  
the Office of Thrift Supervision has assigned a risk weight of 50% for prudently
underwritten permanent one- to four-family first lien mortgage loans not more   
than 90 days delinquent and having a loan-to-value ratio of not more than 80% at
origination, unless insured to such ratio by an insurer approved by Fannie Mae  
or Freddie Mac.                                                                 

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On December 31, 2001, we had total risk-based capital of approximately
$10.5 million, including $9.8 million in core capital and $696,000 in qualifying
supplementary capital, and risk-weighted assets of $83.2 million, or total      
capital of 12.60% of risk-weighted assets. This amount was $3.8 million above   
the 8% requirement in effect on that date.                                      

The Office of Thrift Supervision is authorized to impose capital      
requirements in excess of these standards on individual associations on a       
case-by-case basis. The Office of Thrift Supervision and the FDIC are authorized
and, under certain circumstances required, to take certain actions against      
savings associations that fail to meet their capital requirements. The Office of
Thrift Supervision is generally required to take action to restrict the         
activities of an "undercapitalized association" (generally defined to be one    
with less than either a 4% core capital ratio, a 4% core risked-based capital   
ratio or an 8% risk-based capital ratio). Any such association must submit a    
capital restoration plan and until such plan is approved by the Office of Thrift
Supervision may not increase its assets, acquire another institution, establish 
a branch or engage in any new activities, and generally may not make capital    
distributions. The Office of Thrift Supervision is authorized to impose the     
additional restrictions that are applicable to significantly undercapitalized   
associations.                                                                   

     The Office of Thrift Supervision is also generally authorized to reclassify
an association into a lower capital category and impose the restrictions        
applicable to such category if the institution is engaged in unsafe or unsound  
practices or is in an unsafe or unsound condition.                              

  The imposition by the Office of Thrift Supervision or the FDIC of any of
these measures on AMB Financial or American Savings may have a substantial      
adverse effect on our operations and profitability.                             

 LIMITATIONS ON DIVIDENDS AND OTHER CAPITAL DISTRIBUTIONS. The Office of
Thrift Supervision imposes various restrictions on savings associations with    
respect to their ability to make distributions of capital, which include        
dividends, stock redemptions or repurchases, cash-out mergers and other         
transactions charged to the capital account. The Office of Thrift Supervision   
also prohibits a savings association from declaring or paying any dividends or  
from repurchasing any of its stock if, as a result of such action, the          
regulatory capital of American Savings would be reduced below the amount        
required to be maintained for the liquidation account established in connection 
with American Savings mutual to stock conversion.                               

     American Savings may make a capital distribution without the prior approval
of the Office of Thrift Supervision provided we notify the Office of Thrift     
Supervision at least 30 days before we declare the capital distribution and we  
meet the following requirements: (i) we have a regulatory rating in one of the  
two top examination categories, (ii) we are not of supervisory concern, and will
remain adequately- or well- capitalized, as defined in the Office of Thrift     
Supervision prompt corrective action regulations, following the proposed        
distribution, and (iii) the distribution does not exceed our net income for the 
calendar year-to- date plus retained net income for the previous two calendar   
years (less any dividends previously paid). If we do not meet the above stated  
requirements, we must obtain the prior approval of the Office of Thrift         
Supervision before declaring any proposed distributions.                        

     QUALIFIED THRIFT LENDER TEST. All savings institutions are required to meet
a qualified thrift lender test to avoid certain restrictions on their           
operations. This test requires a savings institution to have at least 65% of its
portfolio assets (as defined by regulation) in qualified thrift investments on a
monthly average for nine out of every 12 months on a rolling basis. As an       
alternative, the savings institutions may maintain 60% of its assets in those   
assets specified in Section 7701(a)(19) of the Internal Revenue Code. Under     
either test, these assets primarily consist of residential housing related loans
and investments. At December                                                    

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31, 2001, American Savings met the test and has always met the test since its   
effectiveness. American Savings' qualified thrift lender percentage was 77.13%  
at December 31, 2001.                                                           

     Any savings institution that fails to meet the qualified thrift lender test
must convert to a national bank charter, unless it requalifies as a qualified   
thrift lender and remains a qualified thrift lender. If an institution does not 
requalify and converts to a national bank charter, it must remain Savings       
Association Insurance Fund-insured until the FDIC permits it to transfer to the 
Banking Insurance Fund. If an institution has not yet requalified or converted  
to a national bank, its new investments and activities are limited to those     
permissible for both a savings association and a national bank, and it is       
limited to national bank branching rights in its home state. In addition, the   
institution is immediately ineligible to receive any new Federal Home Loan Bank 
borrowings and is subject to national bank limits for payment of dividends. If  
the institution has not requalified or converted to a national bank within three
years after the failure, it must sell all investments and stop all activities   
not permissible for a national bank. In addition, it must repay promptly any    
outstanding Federal Home Loan Bank borrowings, which may result in prepayment   
penalties. If any institution that fails the qualified thrift lender test is    
controlled by a holding company, then within one year after the failure, the    
holding company must register as a bank holding company and become subject to   
all restrictions on bank holding companies. See "- Holding Company Regulation." 

 COMMUNITY REINVESTMENT ACT. Under the Community Reinvestment Act, every
FDIC insured institution has a continuing and affirmative obligation, consistent
with safe and sound banking practices, to help meet the credit needs of its     
entire community, including low- and moderate- income neighborhoods. The        
Community Reinvestment Act requires the Office of Thrift Supervision, in        
connection with its examination of American Savings, to assess the institution's
record of meeting the credit needs of our community and to take this record into
account in our evaluation of certain applications, such as a merger or the      
establishment of a branch, by American Savings. An unsatisfactory rating may be 
used as the basis for the denial of an application by the Office of Thrift      
Supervision. American Savings was examined for Community Reinvestment Act       
compliance in July 1999 and received a rating of "satisfactory".                

 TRANSACTIONS WITH AFFILIATES. Generally, transactions between a savings
association or its subsidiaries and its affiliates are required to be on terms  
as favorable to the association or subsidiary as transactions with              
non-affiliates. In addition, certain of these transactions, such as loans to an 
affiliate, are restricted to a percentage of the associations' capital.         
Affiliates of American Savings include AMB Financial and any company which is   
under common control with American Savings. In addition, a savings association  
may not lend to any affiliate engaged in activities not permissible for a bank  
holding company or acquire the securities of most affiliates. The Office of     
Thrift Supervision has the discretion to treat subsidiaries of savings          
associations as affiliates on a case by case basis.                             

  Certain transactions with directors, officers or controlling persons are
also subject to conflict of interest regulations enforced by the Office of      
Thrift Supervision. These conflict of interest regulations and other statutes   
also impose restrictions on loans to such persons and their related interests.  
Among other things, such loans must be made on terms substantially the same as  
for loans to unaffiliated individuals.                                          

 HOLDING COMPANY REGULATION. AMB Financial is a unitary savings and loan
holding company subject to regulatory oversight by the Office of Thrift         
Supervision. AMB Financial is required to register and file reports with the    
Office of Thrift Supervision and are subject to regulation and examination by   
the Office of Thrift Supervision. In addition, the Office of Thrift Supervision 
has enforcement authority over AMB Financial and its non-savings association    
subsidiaries which also permits the Office of Thrift Supervision to restrict or 
prohibit activities that are determined to be a serious risk to the subsidiary  
savings association.                                                            

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   As a unitary savings and loan holding company, that has been in existence
since before May 4, 1999, AMB Financial generally is not subject to activity    
restrictions. If AMB Financial acquires control of another savings association  
as a separate subsidiary, it would become a multiple savings and loan holding   
company and the activities of AMB Financial and any of our subsidiaries (other  
than American Savings or any other Savings Association Insurance Fund insured   
savings association) would generally become subject to certain restrictions.    
Additionally, if we fail the qualified thrift lender test, within one year AMB  
Financial must register as, and will become subject to, the significant activity
restrictions applicable to bank holding companies.                              

   FEDERAL SECURITIES LAW. The stock of AMB Financial is registered with the
SEC under the Securities Exchange Act of 1934, as amended. AMB Financial is     
subject to the information, proxy solicitation, insider trading restrictions and
other requirements of the SEC under the Securities Exchange Act of 1934.        

     AMB Financial stock held by persons who are affiliates (generally executive
officers, directors and 10% shareholders) of AMB Financial may not be resold    
without registration or unless sold in accordance with certain resale           
restrictions. If AMB Financial meets specified current public information       
requirements, each affiliate of AMB Financial is able to sell in the public     
market, without registration, a limited number of shares in any three-month     
period.                                                                         

   FEDERAL RESERVE SYSTEM. The Federal Reserve Board requires all depository
institutions to maintain noninterest bearing reserves at specified levels       
against their transaction accounts (primarily checking, NOW and Super NOW       
checking accounts). At December 31, 2001, American Savings was in compliance    
with these reserve requirements.                                                

     Savings associations are authorized to borrow from the Federal Reserve Bank
"discount window," but Federal Reserve Board regulations require associations to
exhaust other reasonable alternative sources of funds, including Federal Home   
Loan Bank borrowings, before borrowing from the Federal Reserve Bank.           

    FEDERAL HOME LOAN BANK SYSTEM. American Savings is a member of the Federal
Home Loan Bank of Indianapolis, which is one of 12 regional Federal Home Loan   
Banks that administer the home financing credit function of savings             
associations. Each Federal Home Loan Bank serves as a reserve or central bank   
for its members within its assigned region. It makes loans to members (i.e.,    
advances) in accordance with policies and procedures, established by the board  
of directors of the Federal Home Loan Bank, which are subject to the oversight  
of the Federal Housing Finance Board. All advances from the Federal Home Loan   
Bank are required to be fully secured by sufficient collateral as determined by 
the Federal Home Loan Bank. In addition, all long-term advances must be used for
residential home financing.                                                     

As a member, American Savings is required to purchase and maintain a  
minimum amount of stock in the Federal Home Loan Bank of Indianapolis. At       
December 31, 2001, American Savings had $1.6 million in Federal Home Loan Bank  
stock, which was in compliance with this requirement. In past years, American   
Savings has received substantial dividends on our Federal Home Loan Bank stock. 
For the fiscal year ended December 31, 2001, dividends paid by the Federal Home 
Loan Bank of Indianapolis to American Savings totaled $121,000, which           
constitutes a $6,000 increase from the amount of dividends received in fiscal   
2000. Over the past five fiscal years these dividends have averaged 7.94% and   
were 7.43% for fiscal 2001.                                                     

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FEDERAL AND STATE TAXATION                                                      

    FEDERAL TAXATION. Savings institutions that met certain definitional tests
relating to the composition of assets and other conditions prescribed by the    
Internal Revenue Code of 1986, as amended, had been permitted to establish      
reserves for bad debts and to make annual additions which could, within         
specified formula limits, be taken as a deduction in computing taxable income   
for federal income tax purposes. The amount of the bad debt reserve deduction is
now computed under the experience method.                                       

In addition to the regular income tax, corporations, including savings
institutions, generally are subject to a minimum tax. An alternative minimum tax
is imposed at a minimum tax rate of 20% on alternative minimum taxable income,  
which is the sum of a corporation's regular taxable income (with certain        
adjustments) and tax preference items, less any available exemption. The        
alternative minimum tax is imposed to the extent it exceeds the corporation's   
regular income tax and net operating losses can offset no more than 90% of      
alternative minimum taxable income.                                             

 To the extent earnings appropriated to a savings institution's bad debt
reserves for "qualifying real property loans" and deducted for federal income   
tax purposes exceed the allowable amount of such reserves computed under the    
experience method and to the extent of the institution's supplemental reserves  
for losses on loans, such excess may not, without adverse tax consequences, be  
utilized for the payment of cash dividends or other distributions to a          
shareholder (including distributions on redemption, dissolution or liquidation) 
or for any other purpose (except to absorb bad debt losses). As of December 31, 
2001, American Savings' excess for tax purposes totaled approximately $1.9      
million.                                                                        

We file consolidated federal income tax returns on a fiscal year basis
using the accrual method of accounting. Savings institutions that file federal  
income tax returns as part of a consolidated group are required by applicable   
Treasury regulations to reduce their taxable income for purposes of computing   
the percentage bad debt deduction for losses attributable to activities of the  
non-savings association members of the consolidated group that are functionally 
related to the activities of the savings association member.                    

Our federal income tax returns for the last three years are open to   
possible audit by the IRS. No returns are being audited by the IRS at the       
current time. In our opinion, any examination of still open returns would not   
result in a deficiency which could have a material adverse effect on our        
financial condition.                                                            

     INDIANA TAXATION. The State of Indiana imposes an 8.5% franchise tax on the
net income of financial (including thrift) institutions. Taxable income for     
franchise tax purposes will constitute federal taxable income before net        
operating loss deductions and special deductions, adjusted for certain items,   
including the addition of Indiana income taxes, property taxes, tax exempt      
interest and bad debts. Other applicable Indiana taxes include sales, use and   
property taxes.                                                                 

    DELAWARE TAXATION. As a company incorporated under Delaware state law, AMB
Financial is exempt from Delaware corporate income tax but is required to file  
an annual report with, and pay an annual fee to, the State of Delaware. The     
Holding Company is also subject to an annual franchise tax imposed by the State 
of Delaware.                                                                    

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COMPETITION                                                                     

 We face strong competition both in originating real estate loans and in
attracting deposits. Competition in originating loans comes primarily from other
savings institutions, credit unions, commercial banks and mortgage bankers who  
also make loans secured by real estate located in our primary market area. We   
compete for loans principally on the basis of the interest rates and loan fees  
we charge, the types of loans we originate and the quality of services we       
provide to borrowers.                                                           

   We attract all of its deposits through our branch offices, primarily from
the communities in which those branch offices are located; therefore,           
competition for those deposits is principally from other savings institutions,  
commercial banks, securities firms, money market and mutual funds and credit    
unions located in the same communities. Our ability to attract and retain       
deposits depends on our ability to provide an investment opportunity that       
satisfies the requirements of investors. We compete for these deposits by       
offering a variety of deposit accounts at competitive rates, convenient business
hours and a customer oriented staff. As of December 31, 2001, we estimate our   
market share of savings deposits in the Gary- Hammond, Indiana MSA market area  
to be approximately 1.81%.                                                      

EMPLOYEES                                                                       

     At December 31, 2001, we had a total of 32 employees, including 5 part-time
employees. Our employees are not represented by any collective bargaining group.
We consider employee relations to be good.                                      

ITEM 2. DESCRIPTION OF PROPERTY                                                 
-------------------------------                                                 

         We conduct business at its main office located in Munster, Indiana. The
following table sets forth information relating to each of our properties as of 
December 31, 2001.                                                              

                             Total
                   Owned     Approximate
                         Year         or         Square        Book Value at
Location                 Acquired     Leased       Footage     December 31, 2001
--------------------------------------------------------------------------------
MAIN OFFICE:                                                                    

8230 Hohman Avenue         1963        Owned        8,400         $   56,000    
Munster, Indiana                                                                

BRANCH OFFICES:                                                                 

1001 Main Street           2000        Owned(1)    16,000         $1,756,000    
Dyer, Indiana                                                                   

4521 Hohman Avenue         1983        Owned        1,600         $   78,000    
Hammond, Indiana                                                                

--------                                                                        
1 On October 31, 2000, we purchased the entire property. Our branch office      
occupies 2,800 square feet of the building. The balance of the property is      
leased.                                                                         

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 We believe that current facilities are adequate to meet our present and
foreseeable needs, subject to possible future expansion.                        

    We maintain an on-line data base with a service bureau servicing financial
institutions. The net book value of the data processing and computer equipment  
utilized at December 31, 2001 was $145,000.                                     

ITEM 3. LEGAL PROCEEDINGS                                                       
-------------------------                                                       

We are involved from time to time as plaintiff or defendant in various
legal actions arising in the normal course of business. While the ultimate      
outcome of these proceedings cannot be predicted with certainty, it is our      
opinion, after consultation with counsel representing us in the proceedings,    
that the resolution of these proceedings should not have a material effect on   
the results of operations.                                                      

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     
-----------------------------------------------------------                     

No matters were submitted to a vote of security holders, through the  
solicitation of proxies, during the quarter ended December 31, 2001.            

 PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                
----------------------------------------------------------------                

Page 46 of the Annual Report is herein incorporated by reference.     

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION               
-----------------------------------------------------------------               

Pages 5 through 15 of the Annual Report are herein incorporated by    
reference.                                                                      

ITEM 7.   FINANCIAL STATEMENTS                                                  
------------------------------                                                  

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  The following information appearing in the Annual Report is incorporated
herein by reference.                                                            

                                                                      Pages in
                                                                      Annual
                    Annual Report Section                             Report
------------------------------------------------------------------------------- 

Report of Independent Certified Public Accountants......................  16    

Consolidated Balance Sheets (December 31, 2001 and 2000)................  17    

Consolidated Statements of Earnings (For the Years Ended                        
December 31, 2001 and 2000)...........................................  18  

Consolidated Statements of Stockholders' Equity                                 
(For the Years Ended December 31, 2001 and 2000)......................  19  

Consolidated Statements of Cash Flows (For the Years                            
Ended December 31, 2001 and 2000).....................................  20  

Notes to Consolidated Financial Statements..............................  21    

     With the exception of the aforementioned information in Part II of the Form
10-KSB, the Annual Report is not deemed filed as part of this annual report on  
Form 10-KSB.                                                                    

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
-----------------------------------------------------------------------         
FINANCIAL DISCLOSURE                                            
--------------------                                            

   There has been no Current Report on Form 8-K filed within 24 months prior
to the date of the most recent financial statements reporting a change in       
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.                                              

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
--------------------------------------------------------------------------------
WITH SECTION 16(A) OF THE EXCHANGE ACT                          
--------------------------------------                          

Directors                                                                       
---------                                                                       

Information concerning the directors of AMB Financial is incorporated 
herein by reference from the definitive proxy statement for the annual meeting  
of stockholders to be held in 2002, a copy of which will be filed not later than
120 days after the close of fiscal year.                                        

Executive Officers                                                              
------------------                                                              

    Information concerning the executive officers of AMB Financial who are not
directors is incorporated herein by reference from the definitive proxy         
statement for the annual meeting of stockholders to be held in 2002, a copy of  
which will be filed not later than 120 days after the close of fiscal year.     

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Compliance with Section 16(a)                                                   
-----------------------------                                                   

     Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than 10% of a registered class 
of AMB Financial equity securities, to file with the SEC initial reports of     
ownership and reports of changes in ownership of Common Stock and other equity  
securities of AMB Financial. Officers, directors and greater than 10%           
stockholders are required by SEC regulation to furnish us with copies of all    
Section 16(a) forms they file.                                                  

    To the best of our knowledge, based solely upon information provided to us
by our directors, officers and greater than 10% beneficial owners, all Section  
16(a) filing requirements applicable to such persons were complied with during  
the fiscal year ended December 31, 2001.                                        

ITEM 10. EXECUTIVE COMPENSATION                                                 
-------------------------------                                                 

 Information concerning executive compensation is incorporated herein by
reference from the definitive proxy statement for the annual meeting of         
stockholders to be held in 2002, a copy of which will be filed not later than   
120 days after the close of the fiscal year.                                    

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         
-----------------------------------------------------------------------         

    Information concerning security ownership of certain beneficial owners and
management is incorporated herein by reference from our definitive proxy        
statement for the annual meeting of stockholders to be held in 2002, a copy of  
which will be filed not later than 120 days after the close of the fiscal year. 

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         
-------------------------------------------------------                         

Information concerning certain relationships and transactions is      
incorporated herein by reference from our definitive proxy statement for the    
annual meeting of stockholders to be held in 2002, a copy of which will be filed
not later than 120 days after the close of the fiscal year.                     

36

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 PART IV

ITEM 13. EXHIBITS AND REPORTS ON 8-K                                            
------------------------------------                                            

(a) Exhibits:                                                         

                                                        [Enlarge/Download Table]

                                                                                       Reference to  
                                                                                       Prior Filing  
                                                                                        or Exhibit   
Regulation                                                                                Number     
S-B Exhibit                                                                              Attached    
  Number                              Document                                            Hereto     
---------------------------------------------------------------------------------------------------- 
                                                                                                     
2      Plan of acquisition, reorganization, arrangement, liquidation or succession......    None     
3(i)   Certificate of Incorporation.....................................................       *     
3(ii)  Bylaws...........................................................................       *     
4      Instruments defining the rights of security holders, including indentures........       *     
9      Voting trust agreement...........................................................    None     
10     Material contracts:                                                                           
         1996 Stock Option and Incentive Plan...........................................      **     
         Recognition and Retention Plan.................................................      **     
         Employee Stock Ownership Plan..................................................       *     
         Employee Severance Compensation Plan...........................................       *     
         Employment Agreements..........................................................       *     
         Second Executive Deferred Compensation Plan....................................     ***     
         Trust Agreement for the Compensation Agreement.................................     ***     
11     Statement re: computation of per share earnings..................................    ****     
13     Annual report to security holders................................................      13     
16     Letter on change in certifying accountant........................................    None     
18     Letter on change in accounting principles........................................    None     
21     Subsidiaries of registrant.......................................................      21     
22     Published report regarding matters submitted to vote.............................    None     
23     Consent of experts and counsel...................................................      23     
24     Power of attorney................................................................ Not required
99     Additional Exhibits..............................................................    None     

---------------                                                                 

*    Filed on December 29, 1995 as an exhibit to the Registrant's Registration  
    Statement No. 33-80991 on Form S-1. All of such previously filed documents
    are hereby incorporated herein by reference in accordance with Item 601 of
Regulation S-B.                                                       

**   Filed on September 12, 1996, under Schedule 14A, as an appendix to the     
Registrant's definitive proxy materials and incorporated herein by    
reference.                                                            

***  Filed on March 31, 1999 as an exhibit to the Registrant's Annual Report on 
Form 10-KSB and incorporated herein by reference.                     

**** See Note A of the Notes to the Consolidated Financial Statements in the    
Annual Report attached hereto as Exhibit 13.                          

(b) Reports on Form 8-K:                                              

  During the quarter ended December 31, 2001, we filed a Current Report on
Form 8-K, on October 25, 2001, relating to a press release, dated October 24,   
2001, announcing the payment of a cash dividend.                                

37

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SIGNATURES

    In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.                                                                     

           AMB FINANCIAL CORPORATION

Date: April 1, 2002              By:  /s/ Clement B. Knapp, Jr.                 
                                    ----------------------------------------
                               Clement B. Knapp, Jr., Chairman of the Board,
                       President and Chief Executive Officer
                  (DULY AUTHORIZED REPRESENTATIVE)

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the          
Registrant and in the capacities and on the dates indicated.                    

By: /s/ Clement B. Knapp, Jr.           By: /s/ Daniel T. Poludniak             
------------------------------          ------------------------------  
    Clement B. Knapp, Jr., Chairman         Daniel T. Poludniak, Vice-President,
of the Board, President and             Treasurer and Chief Financial   
Chief Executive Officer                 Officer                         
(PRINCIPAL EXECUTIVE AND                (PRINCIPAL FINANCIAL AND        
OPERATING OFFICER)                      ACCOUNTING OFFICER)           

Date: April 1, 2002                     Date: April 1, 2002                     

By: /s/ Donald L. Harle                 By: /s/ Ronald W. Borto                 
------------------------------          ------------------------------  
Donald L. Harle, Director               Ronald W. Borto, Director       

Date: April 1, 2002                     Date: April 1, 2002                     

By: /s/ John G. Pastrick                By: /s/ John C. McLaughlin              
------------------------------          ------------------------------  
John G. Pastrick, Director              John C. McLaughlin, Director    

Date: April 1, 2002                     Date: April 1, 2002                     

By: /s/ Robert E. Tolley                                                        
------------------------------                                          
Robert E. Tolley, Director                                              

Date: April 1, 2002                                                             

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 INDEX TO EXHIBITS

Exhibit No.                    Document                                         
-----------    -----------------------------------------                        
13         Annual Report                                                
21         Subsidiaries of the Registrant                               
23         Consent of Cobitz, VandenBerg & Fennessy                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB40’ Filing		Date		First		Last			Other Filings
		12/31/04		25					10KSB,  10KSB/A,  5
		9/30/04		25					10QSB
		6/30/04		25					10QSB
		3/31/04		25					10QSB
		12/31/03		25					10KSB,  5
		9/30/03		25					10-Q
		6/30/03		25					10-Q,  10-Q/A
		3/31/03		25					10-Q,  10KSB
		12/31/02		6		25			10KSB,  10KSB/A,  5
		9/30/02		25					10-Q
		6/30/02		25					10-Q
Filed on:		4/1/02		38
		3/31/02		25					10-Q
		3/13/02		1
For Period End:		12/31/01		1		37
		10/25/01		37					10-Q,  8-K
		10/24/01		37					8-K
		12/31/00		35
		10/31/00		33					10-Q
		5/4/99		27		31			10-Q
		3/31/99		37					10-Q,  10KSB
		9/12/96		37					DEF 14A
		3/29/96		3
		12/29/95		37
									List all Filings